YEAR 1

MARKETING ENVIRONMENT PART 1

MARKETING ENVIRONMENT PART 1

What is 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

What’s one of the key roles of marketing?

To bring customers viewpoint into the organisation

What 2 things underline marketing strategies the most?

Customer acquisition and/or customer retention

What are the 3 marketing environments?

3 marketing environments - which ones have

• Uncontrollable variables

• Controllable variables

Uncontrollable variables = macro + micro

Controllable variables = internal organisation

What are 4 examples of macroeconomic influences?

• Taxation

• Government spending

• Interest rates

• International trading blocs/tarriffs?

Describe the different stages in PESTLE analysis (macro variables):

• Political

• Government policies

• Gov contracts/finances

• Regulations/deregulations

• Factors that impact trade, e.g. sanctions, state relationships

Also politicians have power > can affect business activities > some try to get close (e.g. for lobbying)

Describe the different stages in PESTLE analysis (macro variables):

• Economic

Effect through demand and supply

> Economic cycle - boom (expansion in demand) but recession (decline in sales as less discretionary expenditure spending)

> Factors - monitor unemployment levels, interest rates, gov spending, taxation, economic cycles, etc.

> Consumers - income, spending patterns, saving/investment patterns

Describe the different stages in PESTLE analysis (macro variables):

• Social

• Religion & beliefs

• Lifestyle levels of education

• Change in population

• Social attitudes

• Changing cultural norms of society

• Age structure (baby boomers, gen x, millennials (gen y), gen z, etc.

Demographic - study of human population in terms of size, location, age, race, occupation, etc.

Describe the different stages in PESTLE analysis (macro variables):

• Technological

• Internet developments - affected communications, digital marketing

• Mobile tech - phones, AI

• Online marketing - social networks, change in consumer tech use so marketers have to adapt as well (IF DONT KEEP UP RISK FAILURE)

• RFID - track products & consumers

• Role of tech - administration, communications, development, distribution, customer research/support

Describe the different stages in PESTLE analysis (macro variables):

• Environmental

• Natural environment (earthquakes) & ecological factors (climate change, scarce resources)

• Trends in sustainability

• 'Green consumerism’ - regulations, organic farming, etc.

Describe the different stages in PESTLE analysis (macro variables):

• Legal

• Local & regional - laws from court

• Industry level - regulations specific to an industry, e.g. banking, financial services, or general (employment law)

MARKETING ENVIRONMENT PART 2

MARKETING ENVIRONMENT PART 2

Microeconomic environment:

• The company

Different departments taken into account:

• Accounting

• R&D

• Finance

• operations

Microeconomic environment:

• Suppliers - what is supplier relationship management?

Process of planning & managing relationships with vendors that supply any products/services to the business (e.g. raw materials, etc.)

Microeconomic environment:

• Intermediaries

Firms that help the company promote & distribute product, e.g:

• Real estate agents

• Investment bankers

• Grocery stores

Microeconomic environment:

• Competitors

Important because:

• Competition drives improvement

• Stimulates firms to lower their own costs & run business as efficient as possible

Also remember other 2

General public & customers

What is the marketing mix (marketing activities)?

Tactics that are used to satisfy customer needs & position offerings clearly in mind of consumer

What are the 7p’s of the marketing mix?

• Price

• Place

• Promotion

• Product

(helps meet the challenges of marketing services)

• People

• Process

• Physical evidence (shows quality of experience)

BUYER BEHAVIOUR - CONSUMER

BUYER BEHAVIOUR - CONSUMER

What is the model of buyer behaviour?

What are the 5 characteristics that affect consumer behaviour?

CSPSP

• Cultural

• Social

• Personal

• Situational

• Psychological

Characteristics affecting consumer behaviour - SOCIAL:

• What are 6 social factors?

• What are different groups that can affect behaviour?

• Membership groups (groups with direct influence) - family/friends

• Aspirational groups (group individual wishes to belong to)

• Reference group (groups that form a comparison)

Characteristics affecting consumer behaviour - PSYCHOLOGICAL:

• What is the self-concept theory?

• What is Maslow’s hierarchy of needs?

Self concept theory = theory that people often engage in behaviours that are aimed at maintaining/increasing positivity of one’s self concept

3 things:

• Motivation

• Belief

• Attitudes

Characteristics affecting consumer behaviour - PSYCHOLOGICAL:

• What is the self-determination theory?

3 basic psychological needs:

• Autonomy

• Competence

• Relatedness

All 3 are essential for continued personal growth & wellbeing

What are the 4 broad types of buying behaviour?

***worth noting****

HDCV

1. Complex buying behaviour

2. Dissonance reducing buying behaviour

3. Habitual buying behaviour

4. Variety seeking buying behaviour

What is complex buying behaviour?

• Requires high involvement

• E.g. might be expensive, a big purchase, or risky

• Buyers learn as they go > get others opinions, develop beliefs/attitudes to make informed choices

What is dissonance reducing buying behaviour?

• Requires high involvement BUT consumers see less difference among brands

• E.g. may still be expensive but hard to pinpoint between brands at a certain point (e.g. carpets)

• Afterwards may feel post purchase dissonance - where they see other options OR people say something about their purchase > OFTEN RETURN THINGS

• (as a marketer need to have sale care to persuade them they have made right decision)

What is habitual buying behaviour?

• Requires low involvement + little difference in brands

• E.g. tends to be low cost, frequently bought items like groceries

• Don’t tend to search for information about brand/weight decisions

• Don’t tend to regret decision (as not highly involved)

• (as a marketer need to promote price/sales promotion more than product to promote brand overall)

What is variety seeking buying behaviour?

• Requires low involvement BUT significant perceived brand differences

• E.g. McDonalds & Burger King

• Market leaders encourage habitual behaviour to limit variety seeking behaviour but challenger firms encourage this to try and win customers

What are the steps to the decision making process?

BUYER BEHAVIOUR - B2B (BUSINESS TO BUSINESS)

BUYER BEHAVIOUR - B2B (BUSINESS TO BUSINESS)

What is B2B marketing and who are the customers?

Study of the processes involved when businesses purchase, use or dispose of products/ideas to satisfy their needs

Customers:

• Commercial enterprises

• Governmental bodies

• Institutions

What are the 4 steps to the buyer decision-making process (Hill and Hiller)?

PPSP

1. Precipitation - internal & external triggers (realisation there is a need)

2. Product specification - importance of precisely specifying what is needed

3. Supplier selection - supplier search, established vs new suppliers, existing relationships, nature of purchase, etc.

4. Commitment - importance of monitoring & relationship building

What are the similarities between B2B and B2C buying processes?

(2)

• Both buying processes built upon trust

• Both are complex processes (take time)

What are the differences between B2B and B2C buying processes?

(4)

• B2B customers proactively identify needs to meet their business strategy (whereas B2C customers are often swayed by advertisement/marketing so may not always be a ‘need’ but a ‘want’)

• B2B buy products that meet certain specifications (more strategic, less emotional) - B2C more emotionally driven so more flexible

• B2B buying process longer than B2C

• B2B customers care about post-sales service - B2C only want care for after sale if they are experiencing a problem

What is B2B social media?

Corporate social media

MARKET SEGMENTATION

MARKET SEGMENTATION

What is the model that simplifies market segmentation?

(STP)

What are the 4 key ways a business can segment the market?

1. Geographical segmentation

2. Demographic segmentation (age, gender, religion, income, education, social status) *MOST POPULAR*

3. Psychographic segmentation (lifestyle, personality, attitudes, values) - difficult to do

4. Behavioural segmentation (buyer stage, usage, engagement, benefit) - best starting point especially with digital world

Demographic = statistical data

Psychographic = psychological factors (activities, opinions, interests)

How do firms geographically segment markets?

Localising their products to fit the needs of different geographical units

What is the relationship between brand loyalty and age (when market segmenting)

increasing age = increasing brand loyalty > due to being more emotionally attached to brands

What is one problem of using age to market segment?

Stereotyping

> can be a poor predictor to which stage of the lifecycle customers are at

What marketing strategy can be used to target high income customers?

High touch marketing strategies

What approach is needed to segment people psychographically?

Multi level approach

Psychographic - what is the big 5 personality trait/big five taxonomy?

The Big Five taxonomy organizes traits into the five broad domains:

• extraversion (assertive v introverted)

• agreeableness (kind v cruel)

• conscientiousness (responsible v undependable)

• emotional stability (calm v anxious)

• openness to experience (creative v closedminded)

What are the 4 psychological stages to buy a product?

Awareness > Interest > Desire > Action

When using multivariable segmentation, what should market segments be like? (5)

MASDA

Measurable

Accessible

Substantial

Differentiable

Actionable

Taking away unconscious bias in segmentation is important to increase success

Taking away unconscious bias in segmentation is important to increase success

TARGETING AND POSITIONING

TARGETING AND POSITIONING

What is your ideal target segment?

(3)

• Actively growing

• High profitability

• Low cost of acquisition

What are the 3 key targeting areas when choosing which areas to target?

1. Size and growth - Larger segments with more growth potential usually better (but relative to firm, e.g. luxury brands don’t)

2. Competitive position - if there’s lots of competitors (substitutes) or not

3. Objectives & resources - should only enter a segment if can gain a competitive advantage

Market targeting strategies - target market:

• What are the different types

• Where are they on the spectrum (broad or narrow marketing)

Undifferentiated (mass) marketing:

• Product

• Price

• Promotion

• Disadvantage

Product = designed for everyone - focuses on what’s common in segment (not different)

Price = single pricing structure - doesn’t consider willingness to pay of different segments

Promotion = e.g. billboards, tv adverts

Disadvantage > not strategic (can’t gain a competitive advantage over firms who segment)

Differentiated (segmented) marketing:

• Product

• Price

• Advertising type

Product = target several markets and offer separate products for each

Price = premium prices > can boost sales & have stronger position in segment

Promotion = differentiated marketing, different pricings for ages, etc.

Disadvantage > more costly (extra market research, costs, communication, production, etc.)

Concentrated (niche) marketing:

• Approach

Most focused approach > involves specialising in ONLY 1 SEGMENT (whereas differentiated marketing involved lots of different segments)

Micromarketing, describe:

• Local marketing

• Individual marketing

Local marketing = tailor to local people (personalised messages, etc.) but can be costly as reduces EOS

Individual marketing = extreme tailoring to 1 person, customised marketing & hyper personalisation

A retailer with a value proposition is most likely to …

Offer consumers a balanced combination of product quality at a fair price

What are different types of differentiation:

• Product

• Service

• Channel

• People

• Image

• Product = different features, designs, performance, quality

• Service = speedy convenient service

• Channel = distributing products in innovative ways that give the product added value

• People = hiring & training better people than competitors

• Image = strong, visible, memorable logo/image identity

Pre-emptive meaning

Competitors cannot easily copy the difference

MARKETING MIX - PRODUCT

MARKETING MIX - PRODUCT

What are the 5 different types of products?

(Kolter conceptualisation)

4 User based classification methods?

1 - Convenience products - frequently bought, minimal comparison/buying effort, immediate

2 - Shopping goods - less frequent, lots of comparison/buying effort, more risk, limited problem solving e.g. cars

3 - Speciality goods - infrequent, high risk, expensive, extensive problem solving, e.g. designer clothes

4 - Unsought goods - doesn’t know/think about often, e.g. insurance, funeral services

What is a product line?

Group of brands/products that are closely related in terms of their functions and the benefits they provide, e.g. range of Apple phones, Dell’s range of computers

What does the depth of a product line depend on?

• pattern of customer requirement (e.g., number of segments),

• product depth being offered by competitors

• company resources

What is the product mix?

Product mix is the total set of brands marketed in a company: the sum of the product lines offered

What is the new product development (NPD)?

What are the 6 steps?

IPPDVC

NPD is the original products, improvements and new brands developed from the firm’s own R&D

1. Ideation

2. Product definition

3. Prototyping

4. Detailed design

5. Validation/testing

6. Commercialisation

What is the product life cycle?

What is the diffusion theory?

Rate at which a market adopts an innovation - consumers adapt to new products at different speeds

SERVICES

SERVICES

What are the 4 features of a service?

• Intangibility

• Perishability - cannot be stored for future

• Variability (heterogeneity) - depends upon provider (customisation)

• Inseparability - can’t separate from provider + customers involved in production process

What is the gaps model?

Knowledge gap - what customers expect vs what management think customers expect

Standards gap - what management think customers expect vs actual standards

Delivery gap - experience specification vs actual results

Communication gap - delivery of experience vs what was communication to customer

PLACE

PLACE

Channel distribution - B2C

0. direct channel

1. short channel

2. long channel

3. (longest & indirect channel)

(as goes along is more indirect)

intermediary = mediator (bring 2 things together)

e.g. agents, wholesalers and retailers

intermediary = mediator (bring 2 things together)

e.g. agents, wholesalers and retailers

Why use an intermediary?

increases efficiency & reduces the cost of individual transactions

Categories of adding value by using an intermediary? (3)

What are the 4 key elements of consistency?

access, search, possession, transaction

PROMOTION

PROMOTION

Intergrated maketing communication is..?

The management process of integrating all marketing communications activities across relevant audience points to achieve greater brand coherence