Week 1 – Introduction to Marketing Fundamentals

Marketing:

“Marketing is a social & managerial process by which individuals & groups obtain what they need and want through creating,

offering & exchanging products of value with others”. ‘Marketing’ is process by which firms create value for customers & build

strong customer relationships in order to capture value from customers in return.

1. Understanding the Market Place & Customer Needs, Wants & Demands:

Needs – Not formed by society/marketers. Needed to live. A state of felt deprivation of some basic satisfaction.

Wants – Desires for specific satisfiers of the deeper needs. Constantly shaped & reshaped by social forces

Demands – Wants for specific products that are backed by the ability & willingness to buy

1.3 Products, Value, Cost & Satisfaction Value Creation?

❖ Product – anything that can be offered to satisfy a need or want

❖ Value – perceived benefits gained from having or using the product LESS the cost of obtaining it

❖ Customer Perceived Value Customers evaluation of the difference between perceived benefits & all costs of the

offering, relative to those competing offers

❖ Customer Satisfaction The extent to which a products perceived performance compares to the buyer’s expectations

1.4 Exchange, Transactions & Relationships

Exchange is a way to obtain G&S by offering something in return. Exchange creates value as each party willingly accepts. There,

must be 2 parties, each must have something to offer, willing to deal & free to decide & be able to communicate & deliver

The 5 Marketing Philosophies/Concepts:

1. Production – Widely available & low cost G&S, useful when D exceeds S, or when general product costs are high (cars)

2. Product – High quality, innovative, high performance, many features G&S. Still need to price, place effectively flaw.

3. Selling – emphasis on aggressive selling/promotion efforts. Consumers under buy w/o. Donate blood (unsought G/S).

4. Marketing – Organisational success depends on determining needs, wants & interests of target market & delivering the

desired satisfactions more effectively & efficient than competitors.

a. 4 Pillars – target market, customer needs, coordinated marketing & profitability

5. Societal Marketing – Organisational success depends on determine needs, wants & interests of target market. Than deliver

the desired satisfactions more effectively & efficient than competitors to enhance the consumers & society’s well being.

E.g. J&J would rather take a loss than ship a bad batch of product.

a. 3 Pillars – company profit, customer need/want satisfaction & public interest

Concept Starting Point Focus Means End

Selling Factory Existing Products Selling/Promoting Profits via Sales Volume

Marketing Market Customer Needs Integrated Marketing Profits via Customer Satisfaction

Types of Demand

Negative, No Demand, Latent Demand (needs cannot be satisfied by existing products), Declining, Irregular, Full (firms satisfied

with level of volume), Overfull (higher than capacity), Unwholesome (attract organised efforts to discourage consumption –

use fear)

Week 2 – Company & Marketing Strategy

Strategic fit expresses the degree to which an organization is matching its resources and capabilities with the opportunities in

the external environment. Strategic Planning guides Marketing Strategy & all planning.

DESIGN BUSINESS PORTFOLIO BY EVALUATING INTERNAL & EXTERNAL ENVIRONMENTS & ANALYSING CURRENT BUSINESS PORTFOLIO

Shape future business portfolio by developing strategies for growth & downsizing.

Stars require heavy investment to fund growth but will turn into Cash Cows which

are established low growth businesses that need little investment & produce a lot of

cash to support other SBU’s. Question Marks require heavy investment to maintain

market share, can be built into stars or phased out. Dogs won’t generate much cash.

QM – S – CC – D (life cycle). SBU’s need to be classified & their futures must be

determined &choose whether to:

➢ Invest to build its share

➢ Invest just enough to hold its share

➢ Harvest by milking short term cash flow regardless of long term effects.

➢ Divest by selling it or phasing it out

❖ DEVELOP GROWTH STRATEGIES

This involves funding businesses & products that the firm should consider in the future.

The Product/Market Expansion Grid (ANSOFF) identifies growth opportunities:

Market Penetration – seek to increase sales of existing products in existing markets by adjusting the marketing mix

Market Development – introduce existing products to new markets Review new demographic markets

Product Development – Offering modified or new products to current markets (t –shirts + denims)

Diversification – Starting up or buying of businesses outside current products & markets

Managing the Marketing Effort: Analysis, Planning

➢ Marketing Analysis - marketing organisation’s situation SWOT & PESTLE

➢ Marketing Planning – Deciding on marketing strategies to attain overall strategic

objectives. Brand/product focused

o Marketing Plan - Executive Summary, Situational Analysis, SWOT, Brand

Objectives, Marketing Strategy, Action Programs, Budgeting & Control.

Marketing Departments carries out the action & can be organised in various ways:

❖ Functionally, marketing activities are headed by a functional specialist – sales manager, advertising manager

❖ Geographically, sales & marketing teams assigned to regions.

❖ Product, the product manager implements a strategy & marketing program for the specific product

❖ Customer Management or Market, one product sold to many markets that have different needs (segments)

❖ Combination, for large companies

The Micro – Environment refers to the actors close to the organisation that affect its ability to serve its customers, whilst the

Macro – Environment is the larger societal forces that affect the organisation’s whole microenvironment .

Micro – Environment: Value Delivery Network

The Company Top management (mission, broad strategy) & functional departments must think ‘consumer’

Suppliers Important role in the external value delivery network, vital to the firm in producing G&S to satisfy customers

Marketing Intermediaries Help the firm to promote, sell & distribute its products to final buyers

o Resellers are distribution channels that help the company find customers or make sales to them

▪ Wholesalers & Retails – buy & sell merchandise

o Physical Distribution Firms help to stock & move goods from their point of origin to their destinations

o Marketing Services (research/advertising, consulting) Agencies help the firm promote its product to the right markets

o Financial Intermediaries help to finance transactions &/or insure against risks from the buying/selling of G&S

Competitors for success, the firm must provide greater customer value & satisfaction than competitors

Publics Any group that has an actual or potential interest in or impact on a firm’s ability to achieve its objectives

o Financial, media, government, citizen action, local, general, internal

o Marketing plans can generate goodwill from publics, favourable word of mouth, donations of time/money

o Tremendous power to help/(damage) products beneficial/(harmful) to society (societal marketing concept)

Customers Most Important, the value delivery system aims to serve target customers & create strong relationships

Macro – Environment:

The company & all other actors operate in a larger macro-environment of forces that shape opportunities & pose threats.

Demographic population growth, age, family structure, geographic shifts, education, growing ethnic diversity

Economic Environment Factors that affect consumer purchasing power & spending patterns e.g. GFC

Natural Environment natural resources that are needed as inputs by marketers or are affected by marketing activities

Technological Environment forces that create new technologies, creating new products & market opportunities

Political, Legal & Social Laws, Agencies (ACCC/GOV) & pressure groups that limit organisations/individuals in society

Cultural* Institutions & other forces that affect society’s basic values, perceptions, preferences & behaviours

o Core Beliefs (high degree of persistence) – Passed from parents to children & reinforced by institutions

o Secondary Beliefs (open to change) – shifts in secondary values do occur

Week 3 – Marketing Information & Research Stage 1 MP cont.

Marketing Information System & Why Marketers Need Information:

A Marketing Information System consists of people & procedures for assessing information needs, developing the needed

information, & helping decision makers to use the information to generate & validate actionable customer & market insights.

Assessing Marketing Information Needs:

Developing Information Needs:

❖ Marketing Research – Situation Specific (formal studies to a specific problem/objective)

o Systematic design, collection, analysis & reporting of data relevant to a specific marketing situation facing a firm

▪ Syndicated – Data collected & compiled by research agencies on a regular basis & sold to several firms

• Cost effective, e.g. Nielson or Home scan (monitors 10,000 households shopping)

▪ Custom – Primary data collected to provide answers to specific questions