Introduction to Marketing Revision Notes

Chapter 1 merchandise Principles and smart spate Definitions Charte release Institute of merchandising (CIM) The overr for offprintly hotshot laidment bear on of anticipating, identifying and welcome client requirements profitably (CIM, 2001) The Ameri plenty merchandise Association The goivity, hang of institutions and handlees for creating, communicating, delivering, and exever-changing flings that rush repute for nodes, clients, partners, and federation at swelled. (AMA, 2007) These expositions stress the richness of considering the node requirements and to delivering re foster.The difference in the midst of a node and a consumer, is that the client physi invitey grease ones palmss the carrefour, and the consumer actually de terminal figureinations (or eats) it. The selling Process Marketing comprises 4 levels of activity, which is a comp whizznt in the do of creating value for the client 1. The founding phase. Companies identify guest and consume r postulate, and design the convergence offering nearly their needs to create value for the customer. 2. The conveyment phase. Companies modernize w bes, run, and ideas, which meet those needs and deliver the intended value. 3. The auction pitch phase.Companies distri b arlye those harvest-homes, divine armed arrive at and ideas to their customers and consumers and customers receive the harvest-tide offering and the value created 4. The determination phase. Companies meet whether or non what customers receive veryly fits their needs or non and it not, design the proceeds until it does fit their needs, and provide the customer with real value (or the presidency goes out of art). This imprint for is cyclical, because harvest-tides usually begin with the determination phase. in that location is a feedback loop to determine whether this crop suits customers needs.These wreakes be bowd and dependent upon society and be regulated by government. Marketing An cient or marker recent? Marketing as a coherent ascertain on to bank line has been a outrage since the early 1920s. 1. point of intersectionion period, 1890s-1920s contract on physical cropion and supply, where bring exceeded supply, there was brusque competition, and the range of products was limited. This phase took place aft(prenominal) the industrial revolution. 2. Sales Period, 1920s-1950s focus on personal change backuped by grocery search and advertising. This phase took place after WW1. . Marketing Period, 1950s-1980s to a greater extent advanced focus on customer needs. This phase took place after WW2. 4. Societal Marketing Period, 1980s- impart stronger focus on simulateionate and ethical concerns in market. Marketing as a discipline has developed by with(predicate) the influence of practitioners, and by dint of breedings in the atomic number 18as of industrial frugals, psychology, sociology, and anthropology, (see page 9 for theorists) * Industria l sparing science Influences our fel pitiableship of matching supply with accept comes from the instruction of microeconomics. Psychological Influences our friendship of consumer behaviour comes principally from psychology, limitedly motivational enquiry in relation to consumer attitudes, perceptions, motivations, and training bear upon. * Sociological Influences our knowledge of how crowds of large number be consent comes of importly from sociology, with brainstorms into aras, much(prenominal)(prenominal) as how people from correspondent gender and age crowds be maintain. * Anthropological Influences our debt to social anthropology join ons to a greater extent as we use qualitative market look for nestes such(prenominal)(prenominal) as observation to search consumer behaviour.Differences between Sales and Marketing change Product push Marketing Product pull Marketing * Tends towards want term satisfaction of customer needs * Tends to greater input int o customer design of offering (co-creation) * Tends to high focus on stimulation of demand Sales * Tends towards short-term satisfaction of customer needs. * Tends to slighter input into customer design of offering (co-creation) * Tends to low focus on stimulation of demand, to a greater extent focuse on get together existing demand What do Marketers Do? . Provide merchandising cultivation and customer insight 2. Provide strategic plowing direction for the geological formation 3. Develop the customer proposition 4. make do and provide market converses 5. physical exertion and develop merchandising and customer randomness 6. Lead market operations and course of studys 7. Work with other business functions and 3rd parties 8. Manage and develop teams and dissimilar(prenominal)s Marketers at polar levels of face testament harness dis standardised components of these functions at divergent levels.Generally, senior marketer/ merchandise director allow for guide and direct these functions, while the marketing four-in-hand will manage them, the marketing executive director will undertake the actions unavoid qualified to fulfil these functions, and the marketing assistant will support the marketing executive (CIM, 2OO5). The Marketing Mix and the 4 Ps in that location argon just closely widely distri bargonlyed ideas that divine service managers frame their actions as they develop their marketing plans and undertake marketing tactics. The marketing manager was a intermixer of ingredients, a chef who concocted a unique marketing recipe to fit the requirements of the customers needs at severally grouchy time.Eugene McCarthy (1960) simplified and amended the memorable 4ps from previous lists 1. Product the offering and how it meets the customers needs, packaging and la tolling. 2. Place (distri thation) the delegacy in which the product meets customers needs. 3. personify the cost to the customer, and how the cost improver profi t to the seller 4. Promotion how the products benefits and features argon conveyed to the potential difference buyer Extended Marketing Mix for operate the 7Ps Ameri plentyful scholars, Boom and Bitner (1981), in corporated a further 3Ps into the marketing mix 5. physical evidence to emphasise that the tangible components of service were strategically measurable since customers utilise these to infer what the caliber of the service efficiency be e. g. students requesting brochures of incompatible universities, to pick the course most suitable. 6. Process because service delivery cannot be separated from the customer consumption action. Process is hold because of the need to manage customer judgeations, interaction and satisfaction. E. g. track and trace delivery services. 7.People included to emphasise that services atomic number 18 delivered by customer service personnel, slightlytimes experts and often schoolmasters who interact with the customer nightimes in a n intimate mode (e. g. spa treatments). How they interact with customers, and how satisfied customers atomic number 18 as a pass, is of strategic importance. Market Orientation * Marketing Orientation a comp some(prenominal) that increases the importance of marketing within the organization, e. g. by appointing a marketing person to its lineup of directors. * Market Orientation doesnt just involve marketing.Involves all facial gesture of the comp each, gathering and responding to market intelligence (i. e. customers verbalised needs and preferences, market seek etc) Developing a market orientation means developing the undermentioned * Customer orientation * Competitor orientation * Interfunctional orientation Organisations that manage to develop a market orientation atomic number 18 better at market sensing ( concord the strategic implications of the market for a finicky brass section). Relationship Marketing Organisations must keep relationships with the parties exchangi ng value. 1. Suppliers 2. Potential go forees . Recruiters 4. Referral markets where they exist (banks rely on professional services i. e. estate agents for mortgage referrals) 5. Influence markets e. g. government bodies for companies in the familiar sector 6. Internal markets e. g. existing employees Relationship marketing concerns the integration of customer service and quality assurance. Customer retention is more than important to companies than customer acquisition. look into proves that retention is more profitable than acquisition * Customers will increase their corrupts over time * Customers cheaper to sight up to Customers who atomic number 18 happy with their relationship with a company ar happy to refer to others The Consumer Services Perspective whatever commentators argue that products and services have square differences and similarities Services * providenot be defend by a patent * Do not make use of packaging * Lack a physical display * Cannot be ex hibit in the selfsame(prenominal) way However there are major(ip)(ip) similarities, including the need to * Work at full capacity * Develop good report and service marks * Use promotional media * Use personal selling techniques The five characteristics of service productsService industries are generally seen to have 5 important differentiating characteristics 1. Intangibility enhancing physical milieu, producing brochures, leaflets, by obtaining service quality kite marks. 2. Inseparability production and consumption are inseparable in service markets. in that location is a need to manage carefully relationships between clients and their customers, managing their expectations of the quality of the service that they receive. 3. Variability the quality and standard of service products varies depending on the item-by-item customer and the service provider.Can be difficult to monitor and potency service production to go over incorporateent service standards. 4. Perishabilit y services cannot be stored and consumed at a later date, unless they are recorded. Service- base businesses must maximise how much their facilities are utilize done yield management. E. g. offering discounts at particularized times. 5. Non- birthership customers cannot declare the service they receive because ownership is not transferred from the seller to the buyer as it is with a tangible good. The Business to Business PerspectiveThe emphasis in b2b markets is strongly focuse on the tuition and createing of mutually satisfying relationships establish on commitment and trust, to win the contract in the showtime place. B2b marketers can create a combative advantage if they develop a linkage between the marketing and logistics functions, developing a strong customer service proposition on the following items * Reduction in point cycle times * Simple accurate invoicing procedures * Consistent and reliable delivery * Simple and utile claims procedures * Availability of inv entory sizeable condition of goods and efficacious service delivery * Flexible delivery times * infrangible after-gross revenue support What Impact Marketing has on Society It is important to be particular of marketing. As beneficial as it can be, by providing wants and needs of customers and consumers, with higher(prenominal) engineering science, more ethical products, with it can as well come by marketing bad products, such as alcohol. Cigarettes have been banned to be advertised, plainly it is important to recognise that not all companies market products for the greater good, but because they can make a profit. Chapter 2 The Marketing milieu . foreign Environment 2. Performance Environment 3. Internal Environment The external environment consists of the political, social, and expert influences, and organisations have relatively little influence on all(prenominal) of these things. The performance environment consists of the challengers, suppliers, and indirect service providers who shape the way an organisation achieves its objectives. Here, organisations have a much stronger level of influence. The internal environment concerns the resources, influencees, and polices an organisation manages in collection that it can flak to achieve its goals.These elements can be influences directly by an organisation. Understanding the External Environment The Political Environment The political environment relates to the period of interaction between business, society, and government beforehand those laws are enacted, when they are still cosmos create, or are in dispute. Political environment analysis is a critical phase in environment scanning because companies can then detect potential effective and regulatory changes in their industries and so they can have a put on the line to impede, influence, and alter that legislation. The Economic EnvironmentCompanies have to develop an commiserateing of the economic environment in which they operate and tra de. The external environment of a stanch is affected, but not exclusively, by the following items * Wage Inflation * Price Inflation * Gross Domestic Product (per capita) combined output of goods and services in a particular nation and is a useful account for determining relative wealth between countries * Income, sales, and corporation taxes taxes run at different levels all around the world, substantially affecting how we market goods and services * Exchange rates Export quota controls and duties All these factors can change the meat a company charges for its products and services. Companies need to understand how equipment casualtys or labour cost change if we are importing goods and services, or even components, from another country. The obstacle comes in comparing scathes from one country to another. Firms usually have little impact on the macroeconomic environment since they have little control over macroeconomic variables, e. g. oil prices, which might affect their bu siness. The Socio- cultural EnvironmentLifestyles are constantly changing and consumers are constantly shifting their preferences over time. Companies who get to recognise this will ultimately fail. Companies must consider the nature of households, lifestyles and the family structure, and the changing values in society or in a consumer group as important variables in their scanning process. The Technological Environment The issuance of red-hot technologies can substantially affect not but high-technology businesses but non-technology businesses as well up. Examples include those human faces of technology which impact upon productiveness and efficiency.New technology is increasely changing the way that companies go to market by means of moves towards more email and web- base marketing. The difficulty for most firms is how to determine whether or not to grace in radical new technologies, since the potential benefits are far from resolve at the outset. The Legal Environment Th e legal environment covers every aspect of an organisations business. Laws and regulation are enacted in most countries ranging from the hydrofoil of set, minimum wages, business taxes, product safety, packaging and labelling, the abuse of a prevalent market position.All of these come under the umbrella of the legal environment. The bionomic Environment Concept of sustainability in marketing and corporate (social) responsibility. Increasingly, customers are be worried approximately the impact of companies on their ecological environments. Consumers are every bit concerned with ensuring that products are not sourced from countries with poor and coercive labour policies. Orsato (2006) suggested that a company should adopt one of the following four different grand marketing strategies 1. Eco-efficiency developing lower be through resource productivity (e. . energy efficiency). This approach should be adoptive by companies which need to focus on reducing the cost and environment al impact of their processes. 2. Beyond respectfulness attractionship the adoption of a specialization strategy through organisational processes such as certified schemes to demonstrate their ecological credentials. This approach should be adopted by firms which supply industrial markets, such as car manufacturers. 3. Eco- stigmatizeing the differentiation of a firms products or services to promote environmental responsibility.For case, BP formerly British petroleum who changed their logo to make it green and jaundiced in a flower petal and sun synthesis, which they call the Helios, and slogan to beyond petroleum to reflect their intended shift in meeting the worlds energy requirements to more sustainable sources. 4. Environmental cost leadership the offering of products and services which give greater environmental benefits at a lower price. This strategy suits firms operating in price- view medium ecologically sensitive markets, such as the packaging and chemical indust ries. Chapter 3 Marketing mental science and Consumer Buying Behaviour Diffusion ProcessConsumers purchase products at different times in the product life cycle. 1. Innovators kick starts adoption process 2. Early Adopters speeds up adoption process. Opinion leaders. 3. Early mass more encounter averse than other 2 groups. This group requires reassurance. 4. Late Majority sceptical of new ideas. Only adopt products due to social/economic factors. 5. Laggards opinions hard to change. Small majority. Lowest income and social status. Suspicious of new ideas Innovators 2. 5% of cosmos Early adopters 13. 5% of population Early majority 34% of population Late majority 34% of populationLaggards 16% of population It is likely that a promotional campaign should just be localizeed at innovators and the early majority. Word of mouth and reputation will get round to the late majority and laggards. People are classified into these groups, but the eccentric of people in the groups can swap and change depending on the emblem of product. Consumer Product acquirement Motive Development Information Gathering Product Evaluation Product pick Acquisition Re-evaluation Motive Development the manikin begins when we root we need to acquire a product. This involves initial comprehension that some sort of problem needs solving, i. . need a new work Information Gathering the next stratum requires us to look for alternative ways of solving our problem. We are open to ways of solving our problem, i. e. smell online Product Evaluation once we feel we have all the randomness that we need to make a decision, we valuate the products, i. e. choose between 2 dresses Product Selection the product we eventually select is the one that we evaluate as fitting our needs best beforehand. This is a separate stage because there are times when we must re-evaluate, because what we want whitethorn not be right, or not available, i. . pick best dress Acquisition once selection has taken pl ace, different approaches to product acquisition might exist. It is important for the marketers to go through that their customer value the product that they receive, i. e. buy online, with prognosis to return within 14 days, free delivery etc. Re-evaluation the conjecture of cognitive dissonance (Festinger, 1957) suggests that we are motivated to re-evaluate our beliefs, attitudes and opinions. To depress dissonance, we might * discriminatingly forget information * Minimize the importance of an issue, decision or act Selectively expose ourselves to information which agrees with our existing view * Reverse a purchase decision (take product pack) Perceptions Consumer understanding very much depends on how effectively the subject matter is two transmitted and discernd. In any one day, consumers receive thousands of meanss. AMA, 2007 Based on prior attitudes, beliefs, needs, stimulus factors, and situational determinant, individuals perceive objects, events of people in the wo rld about the. Perception is the cognitive impression that is formed of reality which in turn influences the individuals actions and behaviour toward that object.The process of screening such meaningful information from the non-meaningful is known as selective exposure (Dubois, 2000). The implication for marketers is the importance of determining what media your customers use, and which they ignore. perceptual mapping is a useful tool to determine how consumers perceive competing products and services, by comparing labels, fire discolourations and products, by rating those utilise semantic differential questions. study Consumers are continually claiming about new product characteristics, their performance and new trends.Learning is the process by which we acquire new knowledge and skills, attitudes and values, through the mediums of study, pay back, or modelling others behaviour. There are numerous theories of human learning, including classical conditioning, operant conditioni ng, and social learning. Classical Conditioning Ian Pavlov verbalise that classical conditioning occurs, because we learn by associating one thing with another, in Pavlovs case, the upright of the bell and arrival of food made the dogs salivate, so eventually, just by the sound of the bell, the dogs assumed that food would arrive.Operant Conditioning muleteer (1954) argued that learning was the result of operant conditioning, which is learnt through behaviour backup, through punishment or reward. neighborly Learning Bandura (1977) suggested humans are much more thoughtful and less animalistic than the Skinnerian behaviourist school of learning suggested. Also separate to operant conditioning, Bandura argued that we can delay gratification and dispense our own rewards our punishment. In other words, we have more choice over how we react to stimuli than Skinner proposed. We can reflect on our own actions and change our future behaviour.In social learning, we learn by observing t he behaviour of others. Memory cognition develops with familiarity, repetition of marketing messages, and consumers acquisition of product/service information. According to Bettman (1979) our memories are extremely complex, there are a variety of memorisation processes which affect consumer choice, some of which include the following 1. Recognition and recall less often used words in advertising are recognised more. The more unique a campaigns message, the better it is recognised, but the worsened it is recalled. 2.Effects of context memorisation is strongly associated with the context of the stimulus, and while information may be available in storehouse it will be inaccessible in the wrong context. 3. Form of coding and storage of objects in memory subjects may store information in the form it is presented to them, all by object ( crisscross) or dimension (product/service attribute). 4. Effect of affect load this concept operates from a capacity allocation theory of memory suggesting that we are likely to find it more difficult to process information into our short and long term memories when we are presented with a great deal of info at once. . Effects of input mode short term recall of auditory input (i. e. sound) is stronger than the short term recall of optic input (sight) where the 2 compete for the consumers caution. 6. Effects of repetition recall and recognition of marketing messages increase the more times a consumer is exposed to them although there are decreasing increments in memory performance and repetition increases. character How and what we buy is also based on our personalities. personalizedity the aspect of our read/write head that determines the way in which we respond to our environment in a relatively stable way over time. 3 main approaches . Psychoanalytic approach stresses self-reported unconscious desires 2. Trait theory stresses classification of personality theatrical roles 3. Self concept approach concerned with how we perceive ourselves as consumers. Psychoanalytic Approach Freud (1927) stated that someones personality is determined by their sexual development through the oral, anal, phallic, latent, and genital stages. An adults personality is developed agree to how well they cope with crises that occur during these 5 phases. ID instinctual drives and urges Ego attempts to find outlets for the urges in our id and acts as a planning centre.Moderated by superego. Superego controls how we motivate ourselves to behave to responds to our instincts and urges, so that we do in a socially acceptable manner, and avoid any feelings of guilt or shame. Social conscience. Trait Approach This approach categorises people into different personality personas. There are 20 needs. E. g. autonomy, aggression, and achievement. Maslow (1943) suggested a class-conscious tack together of human needs Self-actualisation inevitably The need to fulfil our potential Esteem Needs Valued and respected by self a nd others Belongingness Needs Affection, attachment, friendship Safety NeedsA predictable non-threatening environment physiological Needs Food, water, oxygen, sex, and shelter from the elements The importance of each level ranges from country to country, as some needs are more readily available than others. Chapter 4 Marketing enquiry and Marketing Information Systems Marketing research is used to obtain information that provides the management of a company with sufficient insight to make more informed decisions on future activities. For a business to be successful, an organisation must understand the motivations, desires and behaviour of its customers and consumers.Marketing research specifies the information involve to address certain issues design methods for manage and follow through the entropy collection process analyse the results and communicate the findings and their implications. (ESOMAR 1995) Even though marketing research is the foundational element of modern marketi ng practice, market research is valued by some companies more than others. Commissioning Marketing Research Conducting market research depends largely on the coat of the company and the type of product or service being sold. Some large companies employ market research agencies to conduct their research for them.The main advantage of exploitation agencies is that it is relatively cheap compared with under fetching the research in-house and collecting the info independently. The main disadvantages of using agencies are that the agency sometimes cannot achieve the depth of knowledge of the clients problems or market unless it offers a niche specialness in this area. In many syndicated surveys, (retail audits etc) several rival organisations buy the same info from the agency, so a cost effective survey can be carried out. However the survey could be less specific to each business.The Marketing Research Brief Typical contents might include the following * Background summary brief info and details about the company and its products it offers * Management problem clear statement of why the research should be undertaken and which business decisions are dependent upon its outcome * The marketing research questions a detailed list of the information necessary in put in to make the decisions outlined above * The intended scope of the research the areas to be covered, which industries, type of consumer etc. Should be provided.Should give an indication of when the info is required and why that date is important * Tendering procedures the client organisation should outline how agencies are to be selected as a result of the tendering process. Specific info may be required such as CVs from agency personnel to be involved in the study, and referee contact address The Marketing Research Process Stage 1 define the problem Stage 2 decide the research plan Stage 3 undertake the data collection Stage 4 undertake the data analysis/ translation Stage 5 write the repo rt and deliver the presentation command book for detailed descriptions, page 144 belligerent Intelligence and Marketing In formation Systems Its no good having lots of data unless you know how to use it. Companies are frequently swimming in data but have no means to convert the data into intelligence or no means to store it and provide it to end users. Competitive Intelligence the organised, professional approach to collection, analysis, and distribution of timely, accurate and useful information as intelligence products intelligence that contributes materially to the achievement of strategic and tactical business objectives (Nolan, 1999).There are various techniques used which include * Use remote psychological assessment tools to build profiles of business opponents * Collecting matched intelligence at conferences and trade shows * Collecting information on rivals from their customers and suppliers using elicitation techniques * Collecting intelligence on rivals from 3rd part ies using elicitation techniques Marketing Research and Ethics Many supermarkets adopt loyalty cards. The major value of such schemes is the provision of consumption information.This data is analysed by a 3rd party, and sold to the company. Since marketing research is based on the cooperation of the individuals or organisations that provide the answers or fill in the questionnaires, marketing research should be carried out in an objective, unobtrusive, and honest manner. Researchers have been particularly concerned about the publics increase unwillingness to take part in market research. Marketing research should neither attempt to induce sales of a product or service, nor influence customer attitudes, or intentions of behaviours.The general public and other parties are entitled to assurances that no information sedate in a research survey will be used to identify them, or disclosed to a 3rd party without their consent. In conducting any marketing research, researchers have respons ibility for themselves, their clients and the respondents from whom the information is being gathered. inter subject area Marketing Research Marketing researchers need to understand how gloss operates in international markets and how this impacts upon research design. More variables need to be considered.Difficult to decide whether to use the same sampling frame, or study using different scales, sampling methods and sizing. The key issue faced by international researchers is to check over comparable data are collected, despite differences in sampling frames, technological development and availability of inter viewing audience. Conceptual Equivalence when interpretation of behaviour or objects, is similar across countries. Functional Equivalence a concept has similar functions in different countries Translation Equivalence words in some languages have no real equivalent in other languages The world(prenominal) Marketing Survey Research Process . The project is discussed at s pace with the client 2. The fieldwork agencies for each country are selected 3. The questionnaire is developed centrally 4. The questionnaire is translated locally and the translation is checked centrally 5. The questionnaire is piloted locally 6. The questionnaire is finalised centrally 7. The interviewers are briefed locally by an executive of the central company 8. A coding and change plan is provided for the local agencies 9. The edited and coded questionnaires are returned to the head office 10.A coding and editing check is carried out centrally 11. Data processing is carried out centrally Chapter 6 Market section and posture The s.t.p. Process The method by which whole markets are subdivided into different plane sections is referred to as the STP process. STP refers to the 3 activities that should be undertaken. These are 1. Segmentation 2. Targeting 3. Positioning Marketers are increasingly discussion sectioning markets and indentifying attractive segments in order to identify new product opportunities, develop suitable positioning, and communicate strategies (i. . what message to communicate), and effectively divvy up resources to key marketing activities (i. e. how much should we spend and where? ). Organisations operating in highly dynamic environments seek to conduct variance research at unfaltering intervals to keep in touch with changes in the marketplace. Key benefits of STP process include * Enhancing a companys competitive position by providing direction and focus for marketing strategies such as targeted advertising, new product development and brand differentiation. Examining and identifying growth opportunities in the market through the acknowledgment of new customers, growth segments, or new product uses. * More effective and efficient matching of company resources to targeted market segments promises the greatest return on marketing investment. The Concept of Market Segmentation Market segmentation is the sectionalization of a market into different groups of customers with distinctly similar needs and product/service requirements.The purpose of market segmentation is to leverage scarce resources, to ensure that the elements of the marketing mix are designed to meet particular needs of different customer groups. With an increasing proliferation of tastes in modern society, consumers have increased in disposable incomes. As a result, marketers have sought to design product and service offerings around the consumer demand (market segmentation) more than around their own production needs (product differentiation) The process of Market Segmentation There are 2 main approaches to segmenting markets. 1.Breakdown Method this adopts the view that the market is considered to consist of customers which are essentially the same, so the task is to identify groups which share particular differences. 2. Build-up Method considers a market to consist of customers that are all different, so here the task is to find sim ilarities. The breakdown approach is perhaps the most established and well recognized and is the main method used for segmenting consumer markets. The build up approach seeks to move from the individual level where all customers are different, to a more general level of analysis based on the identification of similarities.The aim of some(prenominal) methods is to identify segments in the market where identifiable differences exist between members within each segment (member homogeneity) The segmentation process varies tally to the prevailing conditions in the marketplace and the changing needs of the parties involved, not simply the needs of the selling organisation. Market Segmentation in Consumer Markets To segment the consumer goods and service markets, we use market information we have collected based on certain key customer/product/situation cerebrate criteria (variables).These are classified as segmentation bases, they include profile, behavioural, and psychological criter ia. The fourth segmentation criteria is contact data. The population can be segmented and analysed through various ways * Demographics * Lifecycle * Geographics * Geodemographics * Psychographics * Behavioural criteria Transaction and purchase the development of electronic technologies has facilitated the rapid growth in the collection of consumer purchase and transactional data, providing an additive consumer characteristic upon which to base market segmentation.Segmentation in Business Markets There are 2 main groups of interrelated variables used to segment business-to-business markets 1. Organisational characteristics organisational size/location/industry type ( assault codes). 2. Buyer characteristics ratiocination-making unit structure/choice criteria/purchase situation. Organisational size by segmenting organisations by size, it is accomplishable to identify particular buying requirements. Geographic location particularly useful since it allows sales territories to be dra wn up around particular locations which salespersons can easily service.SIC codes Standard Industrial Classification (SIC) codes are often used to get an indication of the size of a particular market. Easily accessible and assess across most western countries. Decision-making unit a decision making unit may have specific requirements that influence their purchase decisions in a particular market, i. e. policies, purchasing strategies, attitudes towards vendors and towards risk. Choice criteria business markets can be segmented on the priming of the specifications of product/service that they choose. Purchase post there are 3 factors associated with the purchase situation. 1.The structure of the buying organisations purchasing procedures (centralised, flexible etc). 2. What type of buying situation is present (new task, modified re buy, straight re buy) 3. What stage in the purchase decision process have target organisations reached? Target Markets It is important to determine whi ch, if any, of the segments uncovered should be targeted and made the focus of a comprehensive marketing programme. It needs to be judged which markets are selected and exploited, and which markets are ignored. Kotler (1984) suggested that for market segmentation to be effective, all segments must be * Distinct Accessible * Measurable * bankable Targeting Approaches once identified the company needs to select its approach to target marketing it is going to adopt. Four differing approaches can be considered 1. Un severalized marketing e. g. UK post office, targets mass market. 2. Differentiated marketing e. g. Levis, targets multiple market segments. 3. pore/concentrated marketing e. g. Jordan cereal targets consumers interested in organic. 4. Customised marketing B2B markets (e. g. marketing research or advertising services) Market Segmentation Some Limitations The process involves approximating product/service offering to the needs of customer groups, rather than providing an in dividual customised offering, there is a chance that our customers needs are not being fully met. * There is insufficient consideration of how market segmentation is cerebrate to competitive advantage. Market segmentation has not tended to stress the need to segment on the basis of differentiating from competitors. * It is unclear how valuable segmentation is to the manager. Suitable processes and models to foreshadow how to measure the effectiveness of market segmentation processes are not provided available. Process issues lack of experience, guidance and expertise concerning the way in which segmentation is undertaken and managed. Positioning Having segmented the market, determined the size and potential of market segments, and selected specific target markets, the 3rd part of the STP process is to position a brand within the target market. Positioning is important because it is the means by which goods and services can be differentiated from one another and so give consumers a reason to buy. Its about how customers judge a products value relative to competitors and its ability to deliver against the promises made. . Physical attributes functionality and capability that a brand offers. 2. Communication the way the brand is communicated and how consumers perceive the brand relative to other competing brands in the marketplace. Perceptual Mapping Perceptual mapping represents a geometric comparison of how competing products are sensed. The further apart the positions, the greater the opportunity for new brands to enter the market, because competition is less intense. reposition Strategies Markets, consumer tastes, fashions and competitors change. There are four main ways to approach shift a product. . miscellanea the tangible attributes and then communicate the new product 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 attribu tes and the target market. Chapter 9 Products, Services, and firebranding Decisions The 3 levels of a product 1. The core product consists of the real core benefit or service. whitethorn be a functional benefit in footing of what the product will enable you to do, or an emotional benefit in terms of how it will make you feel.E. g. cars provide transportation and a means of self- submition. 2. The bodied product consists of the physical good or delivered service that provides the expected benefit. E. g. features, durability, design, packaging, brand name etc. 3. The augmented product consists of the embodied product plus all other factors necessary to support the purchase. E. g. credit and finance, training, delivery, installation, guarantees. Consumer Products Durable goods can be used repeatedly and provide benefits each time they are used e. g. ike, Ipod Non-durable goods limited duration, often only dependent of being used once e. g. yoghurt, newspaper Convenience products can be sub-divided into 3 categories 1. permanent products bread, milk, petrol 2. Impulse products chewing gum, chocolate, magazines 3. Emergency products bandages, umbrella, plumber in the philia of the night when theres a leak. Unsought products refers to a group of products which people do not normally anticipate buying or want to buy. For example, insurance sold on the streets, double glazing, and timeshare holiday (mainly products pushed to buy from salespeople).Business Products There are 6 main categories identified according to how organisational customers (business people) use them 1. Equipment goods 2. Raw materials 3. Semi-finished goods 4. Maintenance repair and operating goods 5. Component part 6. Business services Product Lifecycles Product lifecycle is the belief that products move through a sequential, predetermined pattern of development. It consists of 5 distinct stages 1. Development 2. design 3. Growth 4. Maturity 5. Decline Speed of movement through the sta ges will vary but each product has a limited life sentence.The lifespan can be prolonged and extended, but the majority of products have a finite period. It does not apply to all products in the same way. E. g. some products reach the end of the introduction stage and then die as it becomes clear there is no market to sustain the product. Some products get to decline, and then get recycled back to growth stage by move activities. Usefulness of Product Life Cycle The plc (product life cycle) concept allows marketing managers to adapt strategies and tactics to meet the needs of evolving conditions and product circumstances.It is a well known and popular concept and is a useful means of explaining the passage a product or brand has taken. empower, simple and predictable. However, in practice the PLC is not great use. Difficult to tell when the product has hit each stage in the cycle. Historical sales data does not help managers identify when a product has moved from one stage to an other, so it is difficult to forecast sales and determine the future shape of the PLC curve. bang-up care is required when using the PLC. Idea propagation Idea Generation Screening Business Plans and Market AnalysisProduct Development and Selection Test Marketing Commercialisation The Process of Adoption The process through which individuals accept and use new products is referred to as the process of adoption (Rogers 1983). The process starts with people gaining awareness of a product and moves through various stages of adaptation before a purchase is eventually made. 1. Knowledge 2. Persuasion 3. Decision 4. Implementation 5. Confirmation Branding Branding is a method through which manufacturers and retailers help customers to differentiate between the various offerings in a market.It enables them to make associations with certain attributes or feelings with a particular brand. Brands are products and services that have added value. This value has been deliberately designed and presented by marketing managers in an attempt to augment their products with values and association that are recognised by and are meaningful to customers. It is customer perception and the brands value which is important. AMA definition a name, term, sign, symbol, design or a combination, intended to identify the goods, or services of one seller or group of sellers, and to differentiate them from those of competitors (2006).There are 2 main types of attributes 1. Intrinsic functional characteristics of a product, such as shape, performance etc. 2. Extrinsic brand name, price, packaging, marketing talks etc. Benefits of mark for consumers * functions people to identify their preferred products * Reduces level of sensed risk * Help people gauge the level of product quality * Reduces amount of time spent making product based decisions, decreases bring out time. * Provide psychological reassurance or reward, especially for products bought on an occasional basis (e. g. esigner h andbag) * Inform consumers about the source of a product (country or company) Benefits of branding for manufacturers and retailers * Enable premium pricing * Help differentiate the product from competitive offerings * Encourage cross-selling to other brands owned by the manufacturer * Develop customer loyalty/retention and repeat purchase buyer behaviour * Assist the development and use of integrated marketing communications * Contribute to corporate identity programmes * Provide some legal protection Types of Brands * Manufacturer brands Persil, Heinz, coca-cola, Cadbury. Promoted heavily. distributor (own label) brands Argos, Harvey Nichols, Sainsburys. Sell manufactured and own label. * Generic brands plain flour. furtherance only displays info required by law. Sold at prices substantially at a lower place normal price. Only firms in pharmaceutical sector use this type of brand now, as popularity elsewhere has declined. Brand Policies Individual branding requires that each pro duct offered by an organisation is branded independently of all the others. E. g. Unilever uses individual branding with Cif, Knorr and Dove. Advantages * Easy to target specific segments and to enter new markets with separate names. If a brand fails or becomes subject to negative media attention, other brands are not likely to be damaged. Disadvantages * Heavy financial cost as each brand needs to have its own promotional programme and associated support. Family branding requires that all the products use the organisations name, either entirely or in part. E. g. Microsoft, Heinz, and Kelloggs. Advantages * It is hoped that customer trust will develop across all brands. * promotional investment need not be as high as there will be a halo effect across all the brands when one is communicated.Disadvantages * Damage to one product or operative area can cause problems across the organisation. Corporate branding ace umbrella brand, based on the name of the organisation. Used by major s upermarkets, business markets, and financial services. Advantages * promotional investments are limited to one brand. Disadvantages * The risk is similar to family branding where damage to one product or available area can cause problems across the organisation. Co-branding is where two established brands work together, either on one product or service.Brand honor is a measure of the value of a brand. It is an assessment of a brands wealth, sometimes referred to as goodwill. Brand equity is considered important because of the increasing interest in trying to measure the return on promotional investments and pressure by various stakeholders to value brands for balance sheet purposes. A brand with strong equity is more likely to be able to preserve its customer loyalty and so fend off competitor attacks. There are 3 parts associated with brand equity 1. Brand value, based on a financial and accounting base 2.Brand strength, measuring the strength of a consumers attachment to a brand 3. Brand description, represented by the specific attitudes customers have towards a brand Packaging There is a societal and political pressure to ensure that packaging and the materials used are appropriate and capable of being recycled. Packaging has 2 main roles to be, functional and communicative. * Protection * Preserved * Convenience * Clear messages about content, features, and dangers * Good design (complement physical attributes) * Brand identification and reassurance * Layout Labelling Labels are important. Deliver information about product usage * Help promote a brand * Enable brand owners to comply with various regulations and requirements * Good design Chapter 10 Price Decisions Price the amount of money expected, required, or given in payment for something Price something expended or endured in order to achieve an object In marketing terms, we consider price as the amount the customer has to pay or exchange to receive a good or service. Customer Perceptions of set, Q uality and Value Quality is outlined as the standard of something as measured against other things of a similar kind.Consumers have differing views of the quality of the product they have purchased. Value is defined as the regard that something is held to deserve importance of worth. In marketing terms, perceived value refers to what we get for what we pay. Value = Quality/Price Although products might be perceived as expensive, they can still be perceived as value for money (e. g. Panadol is an expensive drug, but is more effective than own-label aspirin) abduce Prices when customers have some idea of what they think is a fair price to pay for a certain good or service, or what they would expect to pay.When customers assess prices, they estimate value using pricing cues, because they do not always know the true cost and price of the item that they are purchasing. Odd Number Pricing also known as psychological pricing. ?1. 99, we think is a lot cheaper than it is. Purchase Context in Pricing starting off with cheaper prices before adding in extras (easy jet), or gym memberships with a small monthly fee but with a yearly contract. Consumers are drawn in more if they initially see a low price. Price Bundling roll up other products together, e. g. magazines with free CDs or DVDs.This is pure price bundling. Mixed price bundling is when different products can be bundled together through choice, such as mobile phone packages with international call packages, SMS packages, and email, which can also be available independently or with other offers. Price bundles can also include cash back not just offering products. For example banks offer cash back schemes on money spent and inputted in their banks (Halifax pay ? 5 every month is ? 1000 is put into a current account). Pricing Approaches The setting of prices depends on a number of factors, such as demand, sales revenue, costs etc.There are 4 types of pricing approaches which can be used 1. Cost-oriented approach (p rices are set based on costs) 2. Demand oriented approach (prices are based on price sensitivity and levels of demand) 3. Competitor-oriented approach (where prices are set based on what competitors charge) 4. Value-oriented approach (prices are set based on what customers commit to offer value) Pricing Policies Although there are 4 main types of pricing approaches, there are in fact many different possible pricing policies which could be used 1. List pricing unsophisticated approach to pricing.A single price is set for a product or service. 2. Loss leader pricing the price of a product is set at a lower level than actual cost to product it. This entices customers into stores, and the loss incurred on these items is made up by increasing costs elsewhere on less price-sensitive items. 3. Promotional pricing when companies temporarily reduce their prices below the standard price for a period of time to pull ahead awareness of the product, to raise brand awareness in the short term. 4. Segmentation pricing where varying prices are set for different groups of customers, e. g. tesco finest, tesco value, George asda, etc.Economists call this price discrimination. 5. Price skimming the start of a products life cycle, a product is charged a lot higher, to remunerate the costs of research and development, and to make the product exclusive. 6. Price perceptiveness the start of a products life cycle, a product is charged a lot lower, to gain market share and feed a large volume of sales to recoup research and development investment. Pricing in the B2B Setting B2B markets exist on the basis that firms sell products and services to one another rather than to end users. From the B2B sellers perspective, there re numerous approaches to pricing products and services including the following * geographical pricing where customers are located * Negotiated pricing set according to specific agreements between company and client * Discount pricing reduce prices on the basi s that customer is prepared to bulk buy * Value-in-use pricing price focuses attention upon customer perceptions, what they expect to pay * Relationship pricing understanding of customers needs, helps generate relationship * Transfer pricing large organisations, internal dealing between different divisions of the company and across national boundaries. Economic value to customer works on basis that a company prices a good according to its value to the client through comparison with a reference or market leading product, taking everything into consideration (start-up and post-purchase costs) Price Elasticity of Demand It allows us to determine how the amount of a good or service relates to the price at which it is offered. inelastic goods and services are defined as such, because a change in price has little effect in sales volumes, whereas elastic goods have large effects.We need to understand this concept in order to understand demand-orientated pricing mechanisms. Chapter 11 An Introduction to Marketing communication theory Marketing communications or promotion is one of the 4ps of the marketing mix. It is used to communicate elements of an organisations offering to a target audience. Communication is the process by which individuals share meaning. There are 3 main models or interpretations, of how communication works. 1. unidimensional model 2. Two-way model 3. Interactive model Linear Model of Communication page 434 Regarded as the basic model of mass communications.First developed by Wilbur Schramm (1955). The linear model emphasises that each phase occurs in a particular sequence, to enable to transmission of information, ideas, attitudes and emotion from one person or group to another. The goal is to create a message that is capable of being comprehended easily by the receiving system. once encoded, the message must be put in a form that is capable of transmission. Once the receiver has received the message, they decode it, to make sense of it. Once understood, receivers react and provide a response, with feedback. The final component is understanding.The source and receiver understand each other. Increasing numbers of people now strike with interactive based communications, so companies and individuals cannot be involved in real dialogue. The linear model therefore is no longer entirely appropriate. The dance Model of Communication People can have a significant impact on the communication process, and the trip the light fantastic toe model goes some way to reflecting their influence. It recognises the importance of personal influences when informing and persuading audiences to think or behave in particular ways.There are 2 main types of influencer * Opinion leader ordinary person who has a heightened interest in a particular topic. * Opinion former involved professionally in the topic of interest. These both have enormous potential to influence audiences. Messages from personal influencers provide reinforcement and m essage credibility. The Interaction Model of communications Model is similar to two-step model but contains one important difference. Mass media is not the only source of communication. Interaction model recognises that messages can flow through various channels and that people can influence the direction and impact of a message.Interaction is about actions that lead to a response and much attention is now given to the interaction that occurs between people. The development of digital technologies has been implemental in enabling organisations to provide increased interaction opportunities with their customers. (e. g. press the red button to get more info). News programmes now encourage viewers to phone or send in their emails and pictures about particular issues. This gets audiences to express their views and in doing so, promoting access to, and interacting with the programme. The use of Marketing CommunicationsThe success of marketing communications depends upon the extent to w hich messages fetter their audiences. These audiences can fall into 3 groups * Customers * short letter members suppliers, retailers, wholesalers, value added resellers * Stakeholders shareholders, employees, local community There are many types of exchange, but 2 of particular importance 1. Transactional Exchanges transactions that occur independently of any previous exchanges. Short term orientation. When a consumer buys an mp3 player, a brand they have not bought from before, then a transactional exchange can be identified. . collaborative Exchanges longer term orientation. Develops between parties who wish to build long-term corroborative relationships. When a consumer buys their 3rd product from the same brand as the mp3 player, perhaps from the same dealer, collaborative exchanges are taking place. Audiences who prefer transactional exchanges will engage better with advertising and mass media-based communications, as messages are impersonal and product focused. Companies by adding extra touches, can convert a shopping experience from transactional to collaborative, by putting in extra effort to maintain relationships.The Tasks of Marketing Communications There are 3 main aspects associated with marketing communications 1. Engagement 2. Audience 3. Responses Communications can be used to differentiate brands and companies, to reinforce brand memories and expectations, to inform (make aware and educate audiences), and finally to channel them to do things or to behave in particular ways. The Marketing Communications Mix The traditional marketing communications mix consists of a set of 5 primary tools 1. advertising 2. Sales promotion 3. Direct marketing 4. Public relations 5. Personal sellingThese 5 primary tools are used in various combinations and with different degrees of intensity in order to achieve different communication goals with target audiences. Word-of-mouth Word-of-mouth communication is interpersonal communication regarding products or services where the receiver regards the communicator as ingenuous. Integrated Marketing Communications IMC is concerned with harmonising the messages conveyed through each of the promotional tools, so that audiences perceive a consistent set of meanings within the messages they receive. Cultural Aspects of Marketing CommunicationsCulture is important because it provides individuals within a society with a sense of identity and an understanding of what is deemed to be acceptable behaviour. at heart businesses various types of culture arises * National culture * Industry/Business culture * Organisational culture * Individual behaviour Corporate Concentration a fewer large organisations own more and more media properties. Chapter 12 Marketing Communications Tools and Techniques The marketing communications mix is a set of 5 tools that can be used in various combinations to communicate with target audiences 1. advertize 2. Sales promotion 3. Public relations 4. Direct marketing 5. P ersonal selling There are 6 key classes of media 1. Broadcast 2. shanghai 3. Outdoor 4. In-store 5. Digital 6. Other (which includes both cinema and ambient media) The Role and Purpose of the Marketing Communications Mix Media fragmentation the expansion of media where different classes of media have recently been used in different ways and developed. Advertising Advertising is a non-personal form of communication. It reaches large, mass audiences in an impersonal way. * Can be used to influence demand for products Can be used to manage perceptions and understanding about the organisation as a whole. Strong theory of advertisement Jones (1991) Weak theory of advertisement Ehrenberg (1997) Other Promotional Methods and Approaches * Sponsorships * Product placement * Branded entertainment * Field marketing * Exhibitions * viral marketing Chapter 13 Managing Communications Strategy, Planning, and Implementation There are 3 core marketing communication strategies, each based on abun dant target audiences * Pull strategies used to communicate with end user customers. Consumers and organisations within a B2B context. * Push strategies