The marketing process involves understanding the market to create, communicate and deliver an offering for exchange.
* The marketing process is an ongoing cycle and often marketers will be undertaking multiple tasks simultaneously.
* Marketers start by understanding the consumers, the market, and how they (the company, product or brand) are currently situated.
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* This may involve undertaking some market research to gain insights into a problem the marketer currently faces or reviewing sales data to understand how the company is currently performing.
The understanding phase of the marketing process involves analysis and assessment of the marketing environment, as well as consumer and business buying behavior.
* Marketers need to learn what customers, clients, partners and society want. This is an ongoing process as customer preferences are continually evolving. Customers' needs and wants change with each product purchased, magazine read, conversation had or television program watched.
* Markets are cluttered and there are many options available to consumers.
Role of Marketing Marketing is the process of creating, distributing, promoting and pricing goods, revise and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment.
* Customer satisfaction
* Customer loyalty
* Value-driven (includes customer's subjective view or assessment of the benefits they receive relative to the costs they incur)
The marketing mix is a set of variables that a marketer can exercise control over in creating an offering for exchange.
It is a framework describing the different elements that marketers need to consider. Frameworks include: * the 4 As framework ? reduce, price, promotion and place (place is more easily understood as distribution). The 4 As framework is the traditional approach to the marketing mix.
1. Product -A good, service, or idea offered to the market for exchange
2. Pence -The amount of money a business demands in exchange for its offerings
3. Promotion - The marketing activities that make potential customers, partners and society aware of and attracted to the offering
4. Distribution (Place) - The means of making the offering available to the customer at the right time and right place Product - A good, service or idea offered to the market for exchange. Products are best understood as a bundle of attributes - the features and functions of a product that benefit the customer. Price is the amount of money a business demands in exchange for its offerings. Willingness to pay refers to what customers are prepared to give in return for what they will get. Read also "Does marketing create or satisfy needs
Promotion describes the marketing activities that make potential customers, partners and society aware of and attracted to the business's offering. The product might be:
* already established, such as Vegemite, where the aim of promotion is to remind customers that Vegemite can be used for breakfast, lunch and tea. Modified, such as a new variation of Coke, where the Introduction to Marketing By Petrodollars variety and to attract potential new customers. New, such as a new release movie, where the aim is to make customers aware of the product for the first time.
* there are 4 tools in the promotions mix: Advertising, public relations, sales promotion, and personal selling.
* Distribution (place) - The means of making the offering available to the customer at the right time and place. The marketer must ensure products are available to the target market in the right amount and at the right time while managing the costs of making the products available. Such costs include inventory, storage and transport.
PESTS - External factors, Macro Environment
SWOT Analysis - External and internal factors, Micro Environment
5 stages of consumer decision-making:
* Need/want recognition - consumers recognizes a need or want for a product
* Information search - begins research into a product
* Evaluation of options - understanding and compares different brands
* Purchase - buys a product, point of sale may be influence here.
Added extras. Post-purchase evolution - evaluate product after purchase, affects subsequent decisions. Influences on consumer decision making:
* Situational influences - affect purchase decisions can include physical location, social situation, time wise, motivation and mood.
* Cultural influences - a system of knowledge, beliefs, values, rituals and artifacts by which a society or other large groups defines themselves. This influences our decisions about purchases.
* Social influences (e. G. Reference groups) - consists of individuals of similar social ranks laced within a hierarchy in a society.
Peer pressure and opinion leaders can play a role in this. Also families are a major contributor in the decision making for the whole family. "Pester power"
* Personal (e. G. Beliefs and Attitudes) - Lifestyles; activities, interests and opinions of an individuals. Personalities; set of unique psychological characteristics and behavioral tendencies. Cognitive Dissonance: "buyer remorse" occurs when a purchasers has doubt about the wisdom about a purchase. Buyers of high end products need reassurance they bought the right thing.
The way a brand (or company) is perceived by consumers relative to its competitors (Market positioning)
* How the organization wants to be perceived by its target market (Company positioning) Market Segmentation: 4 bases for market segmentation
* Demographic-based on demographic variables egg. Age, education etc.
* Geographic - based on geographic location egg. Urban, suburban.
* Behavioral - based on actual behavior towards a product egg. Brand loyalty * Cryptographic - based on lifestyle, aspirations and personality.
Segmentation Criteria ("MAPS")
Sufficiently different from other segments Product New products, modified products, and product line extensions and related to product distinctiveness. During a product's life, one or more characteristics of the product may be modified so that the resulting "new' product supersedes the earlier one. This is often seen in high-tech products such as game consoles, Pad, or smart phones. Product modifications improve the product's performance, quality, or value to the consumer. Product differentiation is the creation of products and product attributes that distinguish one product from another. If customers perceive a difference between competing products, they will examine the specific product characteristics to assist them in making the final purchase choice. Most of the differentiating features are part of the augmented product layer of the total product concept.
* Some of the characteristics that customers may perceive to be differentiators include design, brand, image, style, quality, features and price. Any of these can potentially give the company a competitive advantage in the marketplace.
These characteristics can also be used in the product's promotional activities to emphasis the value of the product and differentiate it from competitors.
Product Lifecycle (PAL)
5. Decline Product will start with a loss and then when product reaches the growth stage will begin to gain profit before declining again with the decline stage.
There are 5 adopter categories:
1 . Innovators (2. 5%) - first adopters of new products, tend to be adventurous and willing to try new things and take risks.
2. Early Adaptors (13. %) - careful choosers of new products, tend to be opinion leaders, respected by peers.
3. Early Maturity (34%) - these consumers tend to be more chooses with their products and less likely to take risks.
4. Late Maturity (34%) - more cautious and skeptical about products but eventually adapt and adopt the new product after social pressure.
5. Laggards(16%) - wary and prefer products are familiar. Product adoption process
* New products? whether a variation of an existing product or a totally new innovation ? are regularly launched onto the marketplace.
Most of them fail. They do not achieve sufficient sales to survive.
* How a consumer perceives a new product, earns about it, and decides to adopt it, typically entails five sequential stages, which form the product adoption process:
1 . Awareness
Promotion: the marketing activities that make potential customers, Advertising campaign: Paid promotion of a business, product or brand to a mass audience (impersonal):
* Benefits: Highest "reach" of all tools in the promotion mix egg.
Reach vs.. Frequency trade-off , low cost per person.
* Limitation: Non-personal, difficult to measure effectiveness, one-way communication (mainly), can't measure reach of person. Personal Selling: Personal communication efforts that seek to persuade consumers to buy products. High-involvement products, and BIB (egg resellers) * Benefits: Can be specifically tailored to individuals so has greater influence than advertising, sales promotions and PR strategies. * Limitations: Expensive, limited reach, labor intensive, time-consuming.
Public relations: Promotional efforts designed to build and sustain good relations between an organization and its stakeholders. Includes: publicity, sponsorship, crisis management
* Benefits: it's free, low cost, high reach, more involvement. Limitations: can't control what the media writes. Sales promotion: range of incentives used to temporarily increase sales egg. Free sales, 2 for 1 and aims for impulse buys.
* Benefits: attracts a large number of new customers.
* Limitations: only effective with advertising.
Communication Objectives (must be S. M. A. R. T):
1. Increase awareness
2. Brand attitude/image
3. Brand responses
Price is the most readily changeable characteristic of a product. It is a key element in the marketing mix because it relates directly to generation of revenues and quantities sold. It is a key component of the profit equation (No formulae required in exam) Pricing can be based upon:
Price skimming: charging the price high then lowering later in the product life.
Penetration pricing: setting a low price and maintaining.
1 . Cost based pricing: calculating the different types of costs and adding a mark up. "loss leader" new product introduced at a super low price in the hope that costumers come in and purchase full price products.
2. Demand based pricing: demands of product set the market price, requires lots of and accurate research.
3. Competition based: price setting guided by the prices charged by competitions. Non-price competition: based on other factors such as quality, brand image.
Adaptations in price-setting "DORIC":
* Odd-even pricing: egg. Scents is seen cheaper then $1
* Reference pricing: inferring value by providing a higher comparison price
* Differential pricing: charging different prices for the same product egg. Senior/ but high prices for refills and extra/
* Bundle pricing: combining several products and offering bundle at a reduced price. Egg. Fast food deals and travel packages.
Place - Making goods and services available in the right quantities, at the right locations, and the right times when customers want them.
Marketing Channel - A group of individuals and organizations directing products from producers to consumers * Indirect: when producers someone to reach consumers and user.
* Direct: producer to consumer. 4 types of utility:
* Time utility: making products available at the time the consumers wants them, egg. 24 hour supermarket.
* Place utility: making the product available in the place the consumer wants them, egg. Corner shop
* Form utility: customizing the product to tit the costumers need (egg, cars) or providing a range of goods. Exchange efficiencies: reducing the number of transactions required between producers and the consumers.
Intensity of distribution:
* Intensive distribution: distributes via every suitable intermediary, egg convenience products.
* Exclusive distribution: distributes through intermediary a single intermediary in given geographic, egg specialty products.
* Selective distribution: distributes through intermediaries chosen for a specific reason Services Marketing Services Marketing: activities performances or benefits which neither involve the exchange of tangible goods nor a transfer of title. Characteristics of services, and the difficulties and challenges they present: ("Interesting Indians Have Penises")
* Intangibility; cannot be easily displayed, communicated and compared. Egg, surfing lesson or sky diving. Challenge: greater risk for buyers, must have as much tangible evidence as possible.
* Inseparability; services must produced and consumed simultaneously. Egg, haircut or dentist trip. Challenge: limits to how long a client will wait, service as separated from service providers.
* Heterogeneity; orations in quality in the delivery of a service from service to service. Egg, McDonald's workers across Australia. Challenge: hard to keep consistency throughout.
* Permissibility; services cannot be stored for a later sale. Egg, an airplane seat loses it's value after the plane departs. Challenge: most services face peaks and troughs in Demand, need to balance supply and demand.
5 dimensions of Service Quality:
* Reliability: Ability to perform the promised service dependably and accurately Assurance: Knowledge and credibility of staff
* Tangibles: physical facilities, equipment and appearance of personnel
*Empathy: caring, individual attention, good communications and customer understanding * Responsiveness: willingness to provide prompt service and help 3 additional As
* People; three sets of people affect the outcome of the service delivery and need to be managed:
1 . The actual service providers
2. The customers or clients
* Process; all of the systems and procedures used to create, communicate, deliver and exchange an offering. Should result in performance that matches the customer's expectations.
* Physical evidence; tangible cues that are used prior to purchase to assess likely service quality.
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