Professional Documents
Culture Documents
Introduction to marketing
1.1. Definition of marketing.
1.1.1. Definition of marketing according to a number of authors.
1.1.2. Marketing concept.
1.2. The consumer behaviour.
1.2.1. A marketing oriented approach.
1.2.2. Consumer needs and wants.
1.2.3. The stages of the buyer decisin process
1.3. The market
1.3.1. Types of markets.
1.3.2. Segmentation, demographics and behavior.
1.4. The environment.
1.5. The competitiveness.
1.6. Marketing management.
1.6.1. Marketing planning.
1.6.2. Marketing mix.
1.6.3. SWOT analysis
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Marketing is not only much broader than selling, it is not a specialized
activity at all. It encompasses the entire business. It is the whole
business seen from the point of view of the final result, that is, from
the customers point of view. Concern and responsibility for
marketing must therefore permeate all areas of the enterprise.
Drucker (1955, 2007).
Implementation of the marketing concept [in the 1990's] requires
attention to three basic elements of the marketing concept. These
are: customer orientation; an organization to implement a customer
orientation; long-range customer and societal welfare.
Cohen (1991).
Now that you have been introduced to some definitions of marketing
and the marketing concept, remember the important elements
summarised as follows:
you move up it, fewer and fewer people satisfy higher level needs. We
begin at the bottom level.
Physiological needs such as food, air, water, heat, and the basic
necessities of survival need to be satisfied. At the level of safety, man
has a place to live that protects him from the elements and predators.
At the third level we meet our social and belongingness needs i.e. we
marry, or join groups of friends, etc.
The final two levels are esteem and self-actualisation. Fewer people
satisfy the higher level needs. Esteem means that you achieve
something that makes you recognised and gives personal satisfaction,
for example writing a book. Self-actualisation is achieved by few. Here
a person is one of a small number to actually do something. For
example, Neil Armstrong self-actualised as the first person to reach
the Moon.
The model is a little simplistic but introduces the concept a differing
consumer needs quite well.
The stages of the buyer decision process are the recognition of the
problem, the search for information, an evaluation of all available
alternatives, the selection of the final product and its supplier (of
course services are included) and then ultimately the post-purchase
evaluation. Lets have a look at each stage and offer a quick
explanation of what its all about, and then lets apply it to an
organisation to help us work out what its all about.
Stage One
Stage one is the recognition of the particular problem or need and
here the buyer has a need to satisfy or a problem that needs solving,
and this is the beginning of the buyer decision process
Stage Two
Stage two is where we begin to search for information about the
product or service. Buyers here begin to look around to find out
whats out there in terms of choice and they start to work out what
might be the best product or service for solving the problem or
satisfying any need.
Stage Three
Stage three sees the evaluation of the available alternatives whereby
the buyer decides upon a set of criteria by which to assess each
alternative.
Stage Four
We buy or select a product/service/supplier at stage four. Individuals
or teams of buyers make the final choice of what to buy and from
whom to buy it.
Stage Five
Interestingly the process does not stop at the point of purchase
because there is a stage five called the post-purchase evaluation. The
process continues even when the product or service is being
consumed by the individual or business. So if it doesnt meet your
needs or solve your problem you can take action to improve the
product or service. Your actions at this point might inform other
potential buyers who would be keen to hear about your experiences
good or bad.
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The Buyer Decision Process(exercise)
Heres a recap: If a marketer can identify consumer buyer behaviour,
he or she will be in a better position to target products and services at
them. Buyer behaviour is focused upon the needs of individuals,
groups and organisations.
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Make decision.
Action.
Post-purchase behaviour i.e. did it meet your expectations? Did you
use it? Was it reliable? Etc.
It is important to understand the relevance of human needs to buyer
behaviour (remember, marketing is about satisfying needs).
Describe the Buying Decision Process for a mobile/smartphone. Fit
your description around the five stages that follow:
Recognition of a need.
Choice of level of involvement (i.e. justifying you time and effort e.g.
low for bubble gum, high for a holiday).
Identification of alternatives.
1.3. El mercado
1.3.1. What is market? Meaning
Usually, Market means a place where buyer and seller meets
together in order to carry on transactions of goods and services.
But in Economics, it may be a place, perhaps may not be. In
Economics, market can exist even without direct contact of buyer and
seller. This fact can be explained with the help of the following
statement.
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1 Sincerity.
2 Excitement.
3 Competence.
4 Sophistication.
5 Ruggedness.
Social class Lower, middle-low, middle, middle-upper, upper, upperupper, working class, blue collar.
Relationship
Customer Type
Product Use
Buying Situation
Purchasing Method
Behavior
Geographic Location
Demographics
Psychographics
Relationship
Product Use
Macroenvironment
The macroenvironment is less controllable. The macro environment
consists of much larger all-encompassing influences (which impact
the microenvironment) from the broader global society. Here we
would consider culture, political issues, technology, the natural
environment, economic issues and demographic factors amongst
others.
Again for Walmart the wider global macro environment will certainly
impact its business, and many of these factors are pretty much
uncontrollable. Walmart trades mainly in the United States but also in
international markets. For example in the United Kingdom Walmart
trades as Asda. Walmart would need to take into account local
customs and practices in the United Kingdom such as bank holidays
and other local festivals. In the United Kingdom 2012 saw the 60th
anniversary of Queen Elizabeth IIs reign which was a national
celebration.
The United States and Europe experience different economic cycles,
so trading in terms of interest rates needs to be considered. Also
remember that Walmart can sell firearms in the United States which
are illegal under local English law. There are many other
macroeconomic influences such as governments and other publics,
economic indicators such as inflation and exchange rates, and the
level nature of the local technology in different countries. There are
powerful influencers such as war (in Afghanistan for example) and
natural disasters (such as the Japanese Fukushima Daiichi nuclear
disaster) which inevitably would influence the business and would be
out of its control.
To summarise, controllable factors tend to be included in your internal
environment and your microenvironment. On the other hand less
controllable factors tend to be in relation to your macro environment.
Why not list your own controllable versus uncontrollable factors for a
business of your choice?
Internal Environment
The internal environment has already been touched upon by other
lessons on marketing teacher. For example, the lessons on internal
marketing and also on the functions within an organization give a
good starting point to look at our internal environment. A useful tool
for quickly auditing your internal environment is known as the Five Ms
which are Men, Money, Machinery, Materials and Markets. Here is a
really quick example using British Airways. Looking internally at men,
British Airways employees pilots, engineers, cabin crew, marketing
managers, etc. Money is invested in the business by shareholders and
banks for example. Machinery would include its aircraft but also
access to air bridges and buses to ferry passengers from the terminal
to the aircraft. Materials for a service business like British Airways
would be aircraft fuel called kerosene (although if we were making
aircraft materials would include aluminium, wiring, glass, fabric, and
so on). Finally markets which we know can be both internal and
external. Some might include a sixth M, which is minutes, since time
is a valuable internal resource.
Lets look at an example of how the internal environment would
impact a company such as Walmart. We are looking at the immediate
local influences which might include its marketing plans, how it
implements customer relationship management, the influence of
other functions such as strategy from its top management, research
and development into new logistics solutions, how it makes sure that
it purchases high-quality product at the lowest possible price, that
accounting is undertaken efficiently and effectively, and of course its
local supply chain management and logistics for which Walmart is
famous.
Microenvironment
The microenvironment is made from individuals and organizations
that are close to the company and directly impact the customer
experience. Examples would include the company itself, its suppliers,
other marketing input from agencies, the markets and segments in
which your business trades, your competition and also those around
you (which public relations would call publics) who are not paying
customers but still have an interest in your business. The Micro
environment is relatively controllable since the actions of the business
may influence such stakeholders.
Walmarts Micro environment would be very much focused on
immediate local issues. It would consider how to recruit, retain and
extend products and services to customers. It would pay close
attention to the actions and reactions of direct competitors. Walmart
would build and nurture close relationships with key suppliers. The
business would need to communicate and liaise with its publics such
as neighbours which are close to its stores, or other road users. There
will be other intermediaries as well including advertising agencies and
trade unions amongst others.
1.5. The competitiveness(see powerpoint)
Introduction
Whatever product a marketer has to offer in the market, one thing is
sure, it's going to get competition. It depends on the product type and
marketplace what degree of competition it'll get. For the success of
any business it is necessary to compete effectively with other
businesses. The best way to mitigate competition is to develop
marketing competitiveness. Marketing Competitiveness is the ability
of an marketing organisation to deliver better value to customers than
competitors.
Meaning of Marketing Competitiveness
A universal and exact definition of marketing competitiveness does
not
exist.
Competitiveness
means
different
things
to
different organisations. Some
marketers
view
marketing
competitiveness as the ability to persuade customers to choose their
offerings
over
alternatives;
while
others
view
marketing
competitiveness as the ability to deliver better values to customers
than competitors.
"Marketing Competitiveness is the ability of a business to improve
continuously marketing process capabilities and deliver better value
to customers than competitors."
It is the ability of a business to add more values for its customers than
competitors and attain a position of relative advantage. It leads to a
situation where a business has an advantage over its competitors by
being able to offer better value, quality, and service.
Customer values are the combination of several benefits offered for
a given price, and comprises all aspects of the physical product and
the accompanying services.
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It is the same with the marketing mix. The offer you make to your
customer can be altered by varying the mix elements. So for a high
profile brand, increase the focus on promotion and desensitize the
weight given to price.
Another way to think about the marketing mix is to use the image of
an artists palette. The marketer mixes the prime colours (mix
elements) in different quantities to deliver a particular final colour.
Every hand painted picture is original in some way, as is every
marketing mix. Lets look at the elements of the marketing mix in
more detail. Click on the links to go to the lesson on each element.
Price
Price is the amount the consumer must exchange to receive the
offering .
Solomon et al (2009).
The companys goal in terms of price is really to reduce costs through
improving manufacturing and efficiency, and most importantly the
marketer needs to increase the perceived value of the benefits of its
products and services to the buyer or consumer.
There are many ways to price a product. Lets have a look at some of
them and try to understand the best policy/strategy in various
situations.
Place
Place includes company activities that make the product available to
target consumers.
Kotler and Armstrong (2010).
Place is also known as channel, distribution, or intermediary. It is the
mechanism through which goods and/or services are moved from the
manufacturer/ service provider to the user or consumer.
Product
Product means the goods-and-services combination the company
offers to the target market.
Kotler and Armstrong (2010).
For many a product is simply the tangible, physical item that we buy
or sell. You can also think of the product as intangible i.e. a service.
In order to actively explore the nature of a product further, lets
consider it as three different products the CORE product, the
ACTUAL product, and finally the AUGMENTED product.
The Product Life Cycle (PLC) is based upon the biological life cycle. For
example, a seed is planted (introduction); it begins to sprout (growth);
it shoots out leaves and puts down roots as it becomes an adult
(maturity); after a long period as an adult the plant begins to shrink
and die out (decline).
The Customer Life Cycle (CLC) has obvious similarities with the
Product Life Cycle (PLC). However, CLC focuses upon the creation and
delivery of lifetime value to the customer i.e. looks at the products or
services that customers NEED throughout their lives.
Promotion
Promotion includes all of the activities marketers undertake to inform
consumers about their products and to encourage potential
customers to buy these products.
Solomon et al (2009).
Promotion includes all of the tools available to the marketer for
marketing communication. As with Neil H. Bordens marketing mix,
marketing communications has its own promotions mix. Whilst there
is no absolute agreement on the specific content of a marketing
communications mix, there are many promotions elements that are
often included such as sales, advertising, sales promotion, public
relations, direct marketing, online communications and personal
selling.
Physical Evidence
(Physical evidence is) . . . The environment in which the service is
delivered, and where the firm and customer interact, and any
tangible components that facilitate performance or communication of
the service.
Zeithaml et al (2008)
Physical Evidence is the material part of a service. Strictly speaking
there are no physical attributes to a service, so a consumer tends to
rely on material cues. There are many examples of physical evidence,
including some of the following buildings, equipment, signs and logos,
annual accounts and business reports, brochures, your website, and
even your business cards.
People
(People are) . . . All human actors who play a part in service delivery
and thus influence the buyers perceptions; namely, the firms
personnel, the customer, and other customers in the service
environment.
Zeithaml et al (2008).
People are the most important element of any service or experience.
Services tend to be produced and consumed at the same moment,
and aspects of the customer experience are altered to meet the
individual needs of the person consuming it.
Process
Process is) . . . The actual procedures, mechanisms, and flow of
activities by which the service is delivered this service delivery and
operating systems.
Zeithaml et al (2008).
There are a number of perceptions of the concept of process within
the business and marketing literature. Some see processes as a
means to achieve an outcome, for example to achieve a 30%
market share a company implements a marketing planning process.
However in reality it is more about the customer interface between
the business and consumer and how they deal with each other in a
series of steps in stages, i.e. throughout the process.
1.6.3. SWOT Analysis
SWOT analysis is a tool for auditing an organization and its
environment. SWOT analysis is the first stage of planning and helps
marketers to focus on key issues. SWOT stands for strengths,
weaknesses, opportunities, and threats. Strengths and weaknesses
are internal SWOT factors. Opportunities and threats are external
SWOT factors. A strength is a positive internal factor. A weakness is a
negative internal factor. An opportunity is a positive external factor. A
threat is a negative external factor. Here is your FREE SWOT template
for you to have a go after youve read our SWOT analysis lesson of
course!.
We should aim to turn our weaknesses into strengths, and our threats
into opportunities. Then finally, SWOT will give managers options to
matchinternal strengths with external opportunities. SWOT is that
simple. The outcome should be an increase in value for customers
which hopefully will improve our competitive advantage.
SWOT exercise, list factors in the relevant boxes. Its that simple.
Below are some FREE examples of SWOT analysis click to go straight
to them
Strengths
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McDonalds has been a thriving business since 1955 and 20 of the top
50 corporate staff employees started as a restaurant level employee.
In addition, 67,000 McDonalds restaurant managers and assistant
managers were promoted from restaurant staff. Fortune Magazine
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locations in all major airports, and cities, along the highways, tourist
locations, theme parks and inside Wal-Mart.
They have an efficient, assembly line style of food preparation. In
addition they have a systemization and duplication of all their food
prep processes in every restaurant.
McDonalds uses only 100% pure USDA inspected beef, no fillers or
additives. Additionally the produce is farm fresh. McDonalds serves
100% farm raised chicken no fillers or additives and only grade-A
eggs. McDonalds foods are purchased from only certified and
inspected suppliers. McDonalds works closely with ranchers, growers
and suppliers to ensure food quality and freshness.
McDonalds only serves name brand processed items such as Dannon
Yogurt, Kraft Cheese, Nestle Chocolate, Dasani Water, Newmans Own
Salad Dressings, Heinz Ketchup, Minute Maid Juice.
McDonalds takes food safety very seriously. More than 2000
inspections checks are performed at every stage of the food process.
McDonalds are required to run through 72 safety protocols every day
to ensure the food is maintained in a clean contaminate free
environment.
. McDonalds was the first restaurant of its type to provide consumers
with nutrition information. Nutrition information is printed on all
packaging and more recently added to the McDonalds Internet site.
McDonalds offers salads, fruit, roasted chicken, bottled water and
other low fat and calorie conscious alternatives.