marketing complete

marketing

the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large

the basic function of marketing

to attract and retain customers at a profit

criticism on marketing

it makes people buy things they don’t really need

need

a basic requirement; universal, fixed for everyone in the population

want

the way a need is expressed by an individual (shaped by personality/culture)

demand

a want that is backed by purchasing power

marketing (course) overview

key questions within marketing (the 4 Ps = the marketing mix)

1. what does a customer want? → product

2. how does a customer obtain it? → place

3. how much is it worth to the customer? → price

4. how does the customer know we can fulfil the need? → promotion

exchange

the act of receiving something from someone by giving something in return → marketing exists through exchanges where the objective for all parties is to feel satisfied

touchpoints

contact points where customers interact with a firm (physical and digital)

the marketing concept

the achievement of corporate goals through meeting + exceeding customer needs and expectations better than the competition

conditions that must be met for the marketing concept to be achieved

1. customer orientation

2. integrated effort (from the whole firm)

3. goal achievement (e.g. profit)

   + discovery and exploitation of latent markets

latent markets

markets not yet served by existing products/offers; they present opportunities for market-oriented companies

efficiency and effectiveness

• efficiency = doing things right (managing processes to a low cost per unit) → “inputs and outputs”

• effectiveness = doing the right things (making the correct strategic choice of which products for which markets)

  • getting the balance right between the two explains the difference between success and failure

market-driven

• = the customer drives every decision

  • market orientation = identification of market opportunities → creation of products → customer satisfaction

    • market-driven firms organise everything around the customer

    • → researching their needs, welcoming change, innovating and striving to out-compete rivals

internally-oriented

• = the firm's own products/convenience drive every decision

  • production orientation = focus on production capabilities → defines business mission and manufactured products → aggressively sold to customers

    • internally-oriented firms organise everything around their own products and convenience

    • → clinging to the status quo and treating marketing as a cost rather than an investment

customer value

• customer value = perceived benefits − perceived sacrifice

  • value is created by maximising perceived benefits (product/image benefits) and minimising perceived sacrifice (monetary/time costs)

customer satisfaction

customer satisfaction = the fulfilment of customer requirements/needs; occurs when perceived performance matches or exceeds expectations

loyalty

• loyalty = a response a customer shows over time (repeated purchasing); customers return to the same supplier if satisfied

  • relationship marketing enhances productivity and lets firm + customers cooperate over the long term

levels of marketing

• strategic/ business: what and why

  • using a firm’s resources to leverage competitive advantage → mission, vision, marketing audit, SWOT, high-level marketing objectives

• operational/ tactical: how

  • deployment of the marketing & service mix; developing longer-term customer relationships

• implementation

  • who is responsible/ how the strategy is carried out/ where things happen/ when action takes place

critiques of the marketing concept

1. marketing concept as an ideology → can lead to a narrow approach

2. marketing and society → by pursuing individual rather than societal gains, the firm benefits with little regard for the wider environment/society

3. marketing as a constraint on innovation → over-reliance on customers as a source of innovation leads to lacklustre innovations

4. marketing as a source of dullness → focus on analysing customers leads to me-too products, copycat promotion, marketplace stagnation

5. marketing as an intrusion → the capacity of marketing messages to interrupt our lives has increased (digital age)

6. activism and authenticity → firms should consider how far CSR policies meet the more controversial/immediate demands of activism campaigns

corporate social responsibility (CSR)

• = the ethical principle that an organisation should be accountable for how its behaviour might affect society and the environment

1. economic (down-up)

2. legal

3. ethical

4. philanthropic

   • CSR advantages: enhanced brand reputation, marketing opportunities, ability to attract/retain employees

   • CSR disadvantages: can be misguided, too costly, encourages consumer cynicism, may not improve profitability

sustainability marketing

• sustainability marketing = reducing environmental damage by creating, producing and delivering sustainable solutions while still satisfying customers and stakeholders

ethical issues in marketing

• product safety, price fixing, misleading advertising, deceptive selling, invasion of privacy (direct & internet marketing)

  • societal concerns → materialism, short-termism

  • environmental concerns → impact of decisions on the environment

  • political concerns → power global firms exert on consumers/governments/suppliers (globalism)

SHIFT framework

• = how to encourage more sustainable consumption behaviour:

  • Social influence

  • Habit formation

  • Individual self

  • Feelings and cognition

  • Tangibility

greenwashing and greenhushing

• greenwashing = misleading or exaggerating a company’s environmental credentials

• greenhushing = deliberately hiding or downplaying genuine sustainability efforts

societal responses to the negative social/environmental impacts of marketing

• consumerism = organised pressure for consumers' rights and protection

• environmentalism = pressure to reduce environmental damage

• ethical consumption = individuals choosing what to buy (or boycott) on moral grounds

B2B buying decision process

need recognition → info search → evaluation → purchase → post-purchase

buying centre

• = the people involved in a purchase decision

  • roles:

    • initiator (raises the need)

    • influencer (shapes criteria)

    • decider (makes the call)

    • buyer (places the order)

    • user (uses it)

    • gatekeeper (controls info flow)

Maslow's hierarchy

= needs are met bottom-up:

• physiological → safety → belonging → esteem → self-actualisation (a want is how a person expresses a need)

market segmentation

= identifying individuals/organisations with similar characteristics that have implications for marketing strategy

market segment (+ variables)

• = a subgroup sharing characteristics that cause similar product needs

  • three segmentation variables:

    1. behavioural (benefits sought, occasion, usage, perceptions and beliefs)

    2. psychographic (lifestyle, personality)

    3. profile (demographic, socio-economic, geographic)

evaluating market segments

market attractiveness (market/ competitive/ political-social-environmental-technological factors) + capability to compete (assets, cost advantages, tech edge, managerial capability)

targeting

= using segmentation to choose segments to serve (target segments)

four target market strategies

1. undifferentiated (one mix, whole market) → e.g. salt

2. differentiated (separate mixes for several segments) → e.g. a carmaker with family, economy, and luxury ranges

3. focused (one mix, one segment) → ferrari

4. customised (a mix per customer)

customer profile

= a description of a customer/ set of customers that includes demographic, geographic, and psychographic characteristics, as well as buying patterns, creditworthiness, and purchase history

positioning

= choosing the target market and the differential advantage → creating a competitive advantage from a customer perspective

four keys to successful positioning

• clarity

• consistency

• credibility

• competitiveness

perceptual map

= tool for determining a brand's position in the market

positioning statement

• summarises company or brand positioning

  • “to (target segment and need) our (brand) is (concept) that (point of difference)”

repositioning

• = changing the target market and/or differential advantage:

  • image → product same, market same (change image only)

  • product → product changed, market same

  • intangible → product same, market changed

  • tangible → both product and market changed

cross-selling and up-selling

• cross-selling = selling a complementary product (a mousepad after a mouse)

• up-selling = selling a higher-spec version (a more capable mouse)

elaboration likelihood model (shahab 2021)

• ELM = explains how persuasion works; the route depends on how much the person actually thinks about the message

  • central route → they think hard about the real arguments (they care + can focus) → change is durable

  • peripheral route → they don't think; they just go on cues like a famous/attractive/credible source → change is temporary

    ⇒ implication of ELM: persuaders (e.g., marketers) must tailor strategies depending on whether they expect their audience to process messages through the central or peripheral route

→ findings: ELM effectively explains the impact of persuasive communications on consumer attitudes and decisions

• application in studies involving new technologies like virtual and augmented reality is limited

marketing environment

• macroenvironment (shapes opportunity and threats) → difficult to influence

  • political and legal forces

  • (physical) environment forces

  • culture and society

  • digital technologies

• microenvironment (shapes strengths and weaknesses) → able to influence

  • customers

  • competitors

  • distributors

  • suppliers

  • strategic partners

companies respond to environmental change in five ways

1. ignorance

2. delay

3. retrenchment

4. gradual strategic repositioning

5. radical strategic repositioning

⇒ (ignorance/delay/retrenchment = the inadequate "barrier" responses)

mission (statement)

• = a broadly defined, enduring statement of purpose that distinguishes a business from others of its type

  • sets out:

    • what business are we in?

    • what business do we want to be in?

mission statement tool (abell)

• customer needs relevant to the company are identified, listed, and are determined on the basis of the product benefits

• customer segmentation key in abell’s model: thorough knowledge of target groups is needed to target product offerings

• technologies is interpreted broadly: including both tech that is used in creation & production, but also used to market product

  ⇒ the mission statement should reflect the customer groups being served, refer to the customer needs being satisfied, and describe the process by which a customer need can be satisfied

marketing audit

= systematic examination of a business’ marketing environment, objectives, strategies, and activities

marketing analysis (the 5 Cs)

• customers

• company

• competitors

• collaborators

• context

SWOT

• internal analysis (strengths/ weaknesses) + external analysis (opportunities/ threats) = SWOT

  • in an exam question, two points must always be combined to create a strategy (e.g. strength with threat, weakness with opportunity, etc.)

marketing objectives

= result from marketing audit and SWOT analysis

product level planning

• segmenting the market and targeting (week 2)

• competitor analysis

• creating competitive advantage

competitor analysis

1. who are the competitors?

2. what are their strengths and weaknesses?

3. what are their strategic objectives and thrust?

4. what are their strategies?

5. what are their response patterns?

⇒ a sustainable competitive advantage is commonly based on offering customers greater value – either through lower prices or better product or service quality

porter’s five forces

creating competitive advantage (from a customer perspective)

• being better (superior quality)

• being faster (responding to the customer need)

• being closer (long-term relationship)

• pricing

⇒ most important thing: that the customer also perceives the advantage as distinguishing (sustainable differential advantage!)

porter’s model of generic strategies for competitive advantage

guerrilla marketing

= unconventional, low-cost, surprise tactics that create buzz (a clever-but-normal billboard doesn't count)

competitive marketing strategies

• attack strategies: gain at expense of competition

• defence strategies: defend market share from competitors

the marketing plan

key questions	stages in marketing planning
where are we now?	business mission, marketing audit, SWOT analysis
where would we like to be?	marketing objectives
how do we get there?	core strategy, marketing mix decisions, organisation, implementation
are we on course?	control

strategies of entry into foreign market (organised by rising commitment/ risk)

• indirect exporting: use of independent organisations within exporter’s domestic market

• direct exporting

  • foreign-based agents/ distributors

  • domestic-based sales representatives

  • overseas sales/marketing office

  • digital channels

• licensing: provision of license to local actors and revenue based in royalty

• franchising: form of licensing in a one-time payment

• joint ventures: contractual or equity based

• foreign direct investment: the firm directly owns operations abroad

development of a global marketing strategy

• standardisation vs adaptation to local market

  • standardise when possible

  • stay local when needed → adaptation

• marketing mix decisions (around the 4 Ps)

questionnaire development (frary 2003) → faulty question types

• leading question = presupposes/steers an answer (e.g. "would you be worried if we discontinued this product line?")

• absolute question = uses never/always (e.g. "why do you never visit the company website?")

• double-barreled = asks two things at once

questionnaire development (frary 2003) → the "undecided"/neutral midpoint is chosen due to

• ignorance (no basis to judge)

• reluctance (won't reveal a true opinion)

• uncooperativeness (won't form an opinion)

→ answer categories must be equidistant, clearly defined, and clarify direction (positive vs negative) → e.g. "not/ somewhat/ very emotional" fails to say whether the emotion is positive or negative

brand

= your promise to your customer

branding (+ aspects)

• = the process by which companies distinguish their product offerings from the competition

  • name

  • symbols & signs

  • packaging

  • design

    → to develop customer associations with the brand and to make purchase decisions easier (perceived benefits & perceived sacrifices)

types of brands

• manufacturer brands (e.g. magnum stieleis)

  • created by producers and bear their chosen brand name

  • manufacturer builds brand equity

• own-label brands (e.g. albert heijn stieleis)

  • created and owned by channel intermediaries

  • typically outsource manufacturing and sell at lower process

  • sometimes referred to as private label, distributor or store brand

brand valuation (+ how it’s measured)

• = the process of estimating the financial value of an individual or corporate brand

  • measured by:

    • performance

    • influence on choice

    • strength relative to competition

brand equity

= a measure of the strength of a brand in the marketplace by the added tangible value to a company through the resulting sales and profits

• consumer-based brand equity

• proprietary-based brand equity

customer-based brand equity

resides in the minds of customers and consists of brand awareness and brand image

brand awareness

• can lead to higher sales and profits, and hence increased brand equity

  • type 1: by raising brand awareness, the likelihood of the brand entering a customer’s mind before making a purchase is increased since awareness is a pre-condition of evaluation of a brand

  • type 2: in low-involvement situations (low importance/ low price), a purchase may follow awareness of a brand with little information processing

brand image

• = brand association

  • is formed by strong, favourable, and unique associations to the brand in the memory

  • is created using all elements of the marketing mix (4Ps) → advertising often employed to create a brand image

proprietary-based brand equity

based on assets attributable to the company

• consists of patents and channel relationships

how to build a brand?

• core product = anything that provides the central benefits required by the customer

• augmented product = core product plus extra functional/ emotional values combined in a unique way to form a brand

how to build a strong brand?

• quality: build quality into the core product

• well-blended communications: create a clear position in the minds of a target audience

• being first: pioneer brands are more likely to be successful than follower brands

• internal marketing: training, communication with, and motivation internal staff

• repositioning: as markets change and opportunities arise, repositioning is needed

• long-term perspective: generating awareness, communicating values, and building loyalty requires commitment

• positioning: creating a unique position in the marketplace

7 factors for successful brand positioning

• brand heritage: background to the brand + its culture

• brand assets: what makes the brand distinctive (symbols, images, etc.)

• brand personality: character of the brand

• brand reflection: how the customer perceives themselves because of buying/ using the brand

• brand values: core values and characteristics

• brand domain: the brand’s target market

4 branding decisions

1. brand name

2. rebranding

3. brand extension

4. co-branding

brand name

= strategy and choices

1. family brand name → a name used for all products

2. individual brand name → the name does not identify a brand with a particular company

3. combination brand name → using both

• considerations when choosing a brand name:

  • evoke positive associations

  • easy to pronounce and remember

  • suggest product benefits

  • be distinctive

  • use numerals or alpha-numerics when emphasising technology

  • be transferable

  • not infringe on existing registered brand name

rebranding

= the act of changing a brand name

• why rebrand?

  • merger or acquisition

  • desire to create a new image/position in the marketplace

  • the sale or acquisition of parts of a business

  • corporate strategy changes

  • brand familiarity

  • international marketing considerations

  • legal problems

brand extension

= using an established brand name for brands within the same broad market or product category (e.g. mcdonalds launching mccafe)

• brand stretching = using an established brand name for brands in unrelated markets or product categories (e.g. dyson from vacuum to hairdryers)

co-branding

1. product-based co-branding (e.g. mastercard + applepay)

2. communications-based co-branding (nike + fc barcelona)

• advantages of co-branding:

  • added value & differentiation, share the cost of introduction, and you can enter a category you'd otherwise struggle to enter alone

• risks of co-branding:

  • loss of control, brand-equity damage if the partner underperforms

the importance of a brand name

• strategic level:

  • reflects the financial value of the company

  • adds a barrier to competition

  • increases the profit (margin)

• operational level:

  • basis for brand extensions

  • quality certification

  • creates trust

invention

= the discovery of new methods, products, and ideas

innovation

= when an invention is brought to the market and/ or generally adopted by the population

crossing the chasm - what to do?

• for innovators and early adopters: use scarcity to incentivise buying (these groups are often happy with a less complete set of features)

• to cross the chasm: use social proof to bring innovation to a larger population

crossing the chasm - what affects the rate of adoption?

• differential advantage = the more added customer benefits a product gives to a customer, the more customers will be willing to buy

• complexity = products that are difficult to understand or use may take longer to be adopted

• divisibility = the degree to which the product can be tried on a limited basis and/ or without much (financial) risk

• communicability = adoption is likely to be faster if the benefits and applications of the innovation can be readily observed/ described to target customers

• compatibility = the new product needs to be compatible with consumers’ behaviour and existing infrastructure

categories of new products

• product replacements: accounts for 45 per cent of new product launches (includes revisions and improvements to existing products)

• addition to existing lines: accounts for 25 per cent of new product launches and take the form of new products that add to a company’s existing product lines (produces greater product depth)

• new product lines: accounts for 20 per cent of all new product launches and represents a move into a new market (this strategy widens a company’s product mix)

• innovations of new-to-the-world products: accounts for 10 per cent of new product launches and creates entirely new markets

product testing categories

• safety testing

• performance testing

• simulated market test

• beta testing = real users trial the product → tests consumer acceptance

service

= a product/ brand with a relative dominance of intangible attributes

the service industry

characteristics of a service

• intangibility

  • a deed, performance, or effort

  • difficulty in evaluation

• variability

  • standardisation difficult

  • selection, training, and rewarding of staff

  • evaluation systems

• inseparabililty

  • simultaneous production and consumption

  • importance of service provider

  • selection, training, and rewarding of staff(?)

• perishability

  • consumption cannot be stored

  • match supply and demand

managing services

• managing customer relationships

• managing service quality

• managing service staff

• managing service productivity

• positioning

service productivity can be improved (without cutting quality) by…

• technology

• customer involvement in production

• balancing supply & demand

the seven Ps

1. physical evidence (props):

   1. appearances

   2. ambiance

   3. layout

2. process

   1. procedures

   2. mechanisms

   3. flow of the activities

3. people

   1. setting standards and monitoring

   2. customer first attitude

   3. examine customer role

→ these 3 (as a service extension to the 4Ps product, price, place, promotion)

managing product portfolios

managing products as groups (portfolios) rather than separate, distinct and independent entities

portfolio planning

• product line = group of brands that are closely related in terms of their functions and the benefits they provide

• product mix = the total set of brands (ALL product lines and items) marketed by the company

managing a large number of brands/ products

• by using several product oriented models

  • product life cycle

  • BCG growth share matrix

  • GE market attractiveness-competitive position model

the product life cycle (PLC)

= a flexible model that can be applied to both brands and product lines

• introduction

  • high marketing and educational costs

  • promotional sales/ adjustment of sales strategy

  • low competition + low sales

• growth

  • demand increases

  • product gains popularity

  • strategies focus on scaling production, distribution, and building brand loyalty

• maturity

  • market saturation occurs

  • sales peak and stabilise

  • competition peaks

  • focus shifts to defending, possible future innovations, and optimising pricing

• decline

  • sales and profits fall due to market saturation, changing consumer preferences, or new innovations

  • companies may reduce marketing, liquidate remaining stock, retire the product, or redesign/ re-release newer models

limitations of the product lifecycle

• not all products follow the same curve

• causality

• unpredictable

• objectives and strategies can be misleading

boston consulting group growth share matrix

• stars (high growth, high share)

  • generate high revenue but require heavy investment to sustain growth

  • modest cash flow (positive or negative)

    • build sales and/ or market share

• cash cows (low growth, high share)

  • yield high returns with minimal investments, funding the company’s other ventures

  • large cash flow (positive)

    • hold sales and/ or market share

• problem children/ question marks (high growth, low share)

  • require significant investment to turn into stars or risk becoming dogs

  • large cash flow (negative)

    • build selectively

    • focus on defendable niche where dominance can be achieved

    • harvest or divest the rest

• dogs (low growth, low share)

  • modest cash flow (positive or negative)

    • harvest or

    • divest or

    • focus on defendable niche

→ ultimate goal is maintaining a balanced portfolio

• cash cows should fund question marks → hoping that question marks eventually become stars → stars will eventually become cash cows as the market matures

critiques of the BCG growth/ share matrix

• oversimplified

• based only on cash flows