MOS 1021- Unit 5 (Student)

UNIT 5: INTRODUCTION TO MARKETING MOS IO2I

Overview of Consumer Behaviour and Human Resources

This Week in the Course

• Topics Covered:

  • Introduction to marketing.

  • Evolution of business philosophies.

  • The marketing environment.

• Textbook Readings:

  • Chapter 8 (pp. 181-199).

  • Chapter 9 (pp. 218-253).

Introduction to Marketing

• Definition and Scope:

  • Marketing involves the process of creating, communicating, and delivering products to align with organizational objectives and fulfill customer needs.

• Marketing: What Is It?

  • Core Concept:

    • Addresses states of felt deprivation, including:

      • Physical needs (Basic survival necessities).

      • Social needs (Desires for belonging and association).

      • Safety and well-being (Stability and security).

The Marketing Process

• Definition:

  • A series of marketing decisions and actions intended to maximize customer value and build lasting customer relationships.

• Key Components:

  • Customer Value = Customer Benefit - Customer Cost.

Marketing Myopia

• Concept:

  • Refers to the disconnect between organizations and their customers, caused by:

    • An excessive focus on the product itself without understanding customer needs.

    • Short-term goals that neglect long-term sustainability.

  • Consequence:

    • Results in a failure to innovate and adapt to market changes, potentially leading to decline or loss of market relevance.

Situation Analysis

• Purpose:

  • Identify unfulfilled needs among existing or potential customers.

  • Assess potential competitors and internal capabilities to strategically position the brand.

Select Target Market

• Definition:

  • Target markets are defined as the group of customers most willing to buy a product, consisting of users who ultimately purchase and utilize the product.

Develop Marketing Strategy

• Objectives:

  • A clear plan to achieve marketing objectives and coordinate the marketing mix effectively in order to appeal to defined target markets.

The Marketing Mix

• Marketing Mix: Product

  • Aspects to Finalize:

    • Product features and specifications.

    • Design and packaging considerations.

    • Services tied to the product that enhance value.

    • Emphasis on the importance of product differentiation to stand out in the marketplace.

• Marketing Mix: Price

  • Definition:

    • The amount requested in exchange for possession or use of the product.

  • Influencing Factors:

    • Manufacturing cost, distribution cost, and promotion cost, alongside the desired profit level.

• Marketing Mix: Place

  • Definition:

    • Refers to how the product becomes accessible to customers.

  • Key Considerations:

    • Channels through which the product is sold.

    • Breadth of distribution (how widely the product is available).

• Marketing Mix: Promotion

  • Objective:

    • Develop coherent messaging about the product to effectively highlight its value proposition.

  • Target:

    • Messaging should be directed at the defined target market to ensure effectiveness.

Maintain Customer Relationships

• Objective:

  • Build and maintain profitable relationships between organizations and customers.

• Influencing Factors:

  • Value perceived by the customer (benefits vs. costs).

  • Satisfaction derived from the performance matching customer expectations.

Customer Relationship Management Programs (CRMs)

• Purpose:

  • Increase customer value, satisfaction, and engagement through:

    • Relevant data collection aimed at relationship building and fostering long-term loyalty.

Evolution of Business Philosophies

• Production Orientation (1900s)

  • Focus:

    • Manufacturing quality products at an affordable price.

  • Characteristics:

    • Little attention paid to customer needs with an emphasis on mass production (early 1900s).

• Selling Orientation (1920-1930)

  • Focus:

    • High-volume sales driven by aggressive selling approaches.

  • Characteristic:

    • May be perceived as manipulative or overly persuasive, prioritizing sales over customer relationships.

• Marketing Orientation (1950-1990)

  • Shift in Focus (1950s):

    • Understanding that products should be based on customer needs and thorough research rather than blanket sales approaches.

• Socially Responsible Marketing Orientation (1990-2000)

  • Characteristics:

    • Emphasizes customer value-driven choices and building relationships with organizations that are socially conscious and responsible.

• Social Media Marketing Orientation (2006-Present)

  • Trends:

    • Utilizing social media platforms for marketing, focusing on creating shareable content and promoting user engagement through various strategies.

Influencer Marketing

• Definition:

  • Collaboration with individuals who have a substantial social media following to promote products and services.

• Benefits:

  • Influencers provide endorsements that function as social proof, helping to enhance brand credibility and reach wider audiences.

Congruence in Influencer Marketing

• Key Insight:

  • When products are congruent with influencer branding, it leads to:

    • More favorable attitudes towards the product among consumers.

    • Higher purchase intentions as a result of perceived alignment and authenticity.

    • Example: A tech youtuber promoting a tech product will have more authority and trustworthiness than someone who does not create tech content.

The Marketing Environment

• Competitive Forces: Competitor Types

  • Direct Competitors:

    • Companies offering similar products in the same category (e.g., Coca Cola vs. Pepsi).

  • Indirect Competitors:

    • Companies providing products that satisfy similar needs (e.g., Coca Cola vs. other beverages like water or juice).

• Nature of Competition: Market Structures

  • Major Types:

    • Monopoly: One organization serves the entire market. Governments usually regulate the company to ensure fair treatment of consumers.

    • Oligopoly: A few large organizations dominate the market. Hard for new orgs to enter the market.

    • Monopolistic Competition: Many organizations offer similar products, creating competition based on differentiation.

    • Pure Competition: Many small sellers provide nearly identical products, competing primarily on price.

• Economic Forces: Consumer Impact

  • Factors Affecting Spending:

    • Economic conditions such as economic booms versus downturns profoundly influence consumer spending habits, alongside the distinction between basic necessities and non-essential products.

• Demographic Forces: Population Trends

  • Aging Population:

    • Baby Boomers represent a demographic with the highest spending power in the current market.

    • Millennials are the largest demographic.

    • The median age is 41

  • Diverse Household Structures:

    • An increase in single-person households and varied contributions to household income impacts consumer behavior significantly.

• Social Forces: Environmental Awareness

  • Green Marketing:

    • Practices highlighting environmentally friendly approaches of products, appealing to eco-conscious consumers.

  • Greenwashing:

    • The act of making misleading claims of environmental friendliness to capitalize on social responsibility for marketing gains.