Marketing
The exploration, creation and delivered value to satisfy the needs of a target market at a profit
Evolution of Marketing
Henry Ford believed that customers get whatās given but now customers choose what they want
Production Orientation
(1860sā1920s)
Anything produced can be sold
Production costs low
Little/ no promotion
Sales Orientation
(1920sā1940s)
People told what they want be companies
Produce best product to sell to customer
Convince people through sales people and advertising
Marketing department orientation
(1940sā1960s)
Products satisfy customer wants
Research and produce only consumer needs
Intense market research before product launches
Marketing company orientation
(1960sā1990s)
Business exists for customer
Strategic and spans all business functions
Targeted products
Relationship marketing
(1990sā2010)
Build relationships with customers
Customer loyalty
Customer relationship management (CRM) and data- mining
Social/mobile marketing
(2010āpresent)
Connected 24/7 with consumers
Focus on social real time interactions
Exchange information, influencers, digital platforms
Relationship marketing
The process of establishing, maintaining and enhancing long-term relationships with customers so that the objectives of both parties are met
Resource markets
Natural resources, sold to intermediaries, primary producers can sell directly to public
Industrial markets
Good, service or idea used to produce other products, classified as secondary or tertiary, products used in production process
Intermediate markets
Called wholesalers, break down large quantities from manufacturer to be sold, donāt sell directly to consumers unless a superstore (Costco, Bunnings)
Consumer markets
Called retailors, sell direct to end user, found in shopping centers, must understand consumer behaviour to be competitive, broken into three sections
Mass market
Product aimed at all consumers, does not break market into common characteristics, appeals to all, popular during production and sales era, common for food, petrol and utilities
Market segment
Breaks market through one key characteristic, like secondary schools
Niche market
A smaller section of a larger market segment, focusing on a select group of customers; also known as a concentrated or micro market
Intermediaries
Independent organisations within the distribution channel that make it possible for products to reach the end user
Primary producer
Involved in the resource market, cultivation of natural resources and the production and sale of raw materials. Output may be marketed in its raw state or sold as an input to another business.
Secondary producer
Involved in the industrial market, processing raw materials and manufacturing goods. This involves converting raw materials into partly processed or finished goods.
Tertiary producers
Involved in the provision of services, rather than production of goods. In the industrial market, these producers support the production and distribution process.
Wholesalers
Businesses that purchase goods from producers with an intention to on sell them to retailers
Retailers
Sell goods or services directly to the final consumer
Factors influencing consumer behaviour
Psychological factors - buying behaviours
Motivation, perception, learning, attitudes, personality, self-concept
Socio-cultural factors - external influences on consumer buying behaviour
Social class, culture, reference groups, family
Economic factors - changes in economic growth patterns over time
Peaks, prosperity, recession, troughs
Government
Economic policies, regulations
Unique selling proposition (USP)
A key factor that differentiates one product from another. It is the reason that one product or service is better than that of the competition ā it is the competitive edge
Marketing objectives
In growth stage: increasing brand awareness and sales, gaining market share, brand loyalty and profit
Sales objectives
Attracting new customers, expanding sales to existing customers, increasing unit sales by 10% for a time, achieving sales revenue growth of 8% for a time
Sales forecast
The process of estimating future revenue by predicting how much of a product or service will sell in the next week, month, quarter, or year to make smart business decisions
Market share
A businessās share of the total industry sales for a particular product or service, often expressed as a percentage
Brand awareness
The extent to which consumers are familiar with the qualities or image of a particular brand of goods or services creating a competitive advantage
Target market
A group of actual and potential customers whose needs and wants a business wishes to satisfy
Segmentation dimensions
Groups of consumers that share similar characteristics
Demographic segmentation
A specific market, which can be based on age, gender, education, ethnicity, family, religion, occupation
Geographic segmentation
A market based on a particular country/ region, state within country, city size, climate, urban vs costal
Psychographic segmentation
A market based on lifestyle, socio-economic group, personality, motives, values/attitudes
Behavioural segmentation
Market based on user status (regular, first time), loyalty, purchase occasion, benefits sought, attitude to product
Differentiation
The ability of a business idea to deliver benefits that exceed those of competitor
Product positioning
Establishing, in the mind of consumers, the identifiable image and attributes of a product (or service) in relation to competing products
4Pās/ marketing mix
Product, price, promotion, place
Product
A product is a good, service or idea whose combined attributes, both tangible and intangible, satisfy consumer needs or wants. Product should have added benefits (e.g. safety stuff in cars)
Total product concept
When customers purchase products, they are buying both the tangible attributes and intangible benefits that make up the total product. This could include the packaging, branding, warranty and after-sales service.
Product line
A group of products that are closely related because they are intended for the same end use or same target market
Product portfolio
The total combination of products that a business sells
Packaging
Goes beyond protecting the product to convey an image and reinforce the positioning and branding strategy. Packaging can be used when segmenting the market by offering the same product in different sizes or forms to enhance usage
Price
The amount of money a consumer is willing to offer in exchange for a product
Market skimming
Charging the highest possible price in the short term to earn a high profit on each item sold and gradually decreasing it in the longer term
Penetration pricing
Charging a very low price in the short term to generate high sales volume and meet sales objectives of the business
Prestige and premium pricing
Price can communicate a strong message to the market about the value of the product: if the aim is to create a prestige brand, setting the price too low or adopting a penetration pricing strategy can undermine this. Works in niche markets
Competition-based pricing
Often used when there is a high degree of competition from businesses with similar products. In this situation, consumers may shop around and compare prices.
Cost-based pricing
Setting prices based on the costs for producing, distributing and selling on a per-unit basis. āCost-plusā pricing is typically used by retailers, who use the price they paid to the producer or wholesaler and add a percentage mark-up to create a profit margin
Loss leader
A good or service offered at a significant discount, often below cost price. Attracts more customers
Psychological pricing
Odd-even pricing ($14.95 vs $15), more expensive something is the better
Dynamic pricing
A strategy in which prices continuously adjust, sometimes in a matter of minutes, in response to real-time supply and demand. The aim is to manage the flow of customer traffic and sales to maximise sales revenue.
Promotion
Use of advertising, sales promotion, publicity, personal selling, digital, social and emerging platforms to communicate with consumers and create sales
Place
The means of getting a product into the hands of the customer. This involves distribution from where the product is made to the customersā preferred place of purchase
Distribution channels
Distribution channels can be either direct to the consumer (producerāconsumer) or indirect, as a product passes through intermediaries
Branding
The name, term, symbol, design or a combination of these that uniquely identifies a product and distinguishes it from the competition
Total product concept
When customers purchase products, they are buying both the tangible attributes and intangible benefits that make up the total product. This could include the packaging, branding, warranty and after-sales service.