Management: Marketing

Markets

Location where transactions take place

• Can be physical and virtual

Marketing

Activities undertaken to plan, price, promote and distribute your good or service

• To achieve business goal(s)

Segmenting the Market

Mass marketing

Marketing your product to all possible consumers

• More effective for broad “needs”

Target marketing

Marketing your product to a segment or a niche

• Can narrow your approach to make a smaller group of a customers happy

Market Size and Share

• Target market

  • a specific group of customers that a business supplies to

  • can consist of multiple markets

e.g. market size is 2M people out of 8M possible wine drinkers: market share is 25%

Market segmentation

Characteristics

Market Research

An organised effort to gather information about consumers’ needs, wants and preferences

• Can be for a target market or for all customers

Market Research Process

1. Determine information needs

Market research is expensive and there must be a purpose in mind

• Is the business trying to…

  • Meet seals targets?

  • Meet their customers needs?

  • Learn about competitors?

  • Add/remove products?

  • Add/remove stores?

2. Collect marketing data

• Business can collect primary data from the original source

  • interviews

  • questionnaires

  • observations

  • test marketing

• Businesses can collect secondary data both internally and externally

  • internal - previous years financial documents, sale record, loyalty programs, etc.

  • external - government data, newspaper reports, journal articles, etc.

3. Analyse marketing data

   • Use only data to answer questions

   • Ideas to change the company should have data to support them

   • Should reveal target market

Positioning

Simplifying your advertising message to stick in the mind of the consumer

• Useful in crowded marketplace to show that you offer something different, niche

• Used by companies who are not necessarily the market leader

Putting it all together

Once you have your target market and position, launch a campaign

• Aims to increase product awareness and improve exposure

• Measure success by achieving/falling short of goals

Simple Marketing Plans

1. Market Position

Summary of the current situation

• The product we sell

• The place we sell it

• The people in our business

• Our current promotion and physical appearance (building, uniform, furniture etc.)

2. Current Market

Which broad industry we fall under

e.g. agriculture, education, mining

• External factors impacting our industry

  • physical

  • economic

  • social/cultural

  • technological

3. Competitor Analysis

• Competitors

  • people - who are they?

  • product - what do they sell? quality

  • price - how much are they charging and can we beat it?

• SWOT Analysis

  • s - strengths

  • w - weaknesses

  • o - opportunities

  • t - threats

  • our internal strengths and external opportunities

  • our internal weaknesses and external threats

4. Target Market Analysis

• Who will our market segment be?

• Target market

  • demographic

  • geographic

  • lifestyle

  • behaviour

• Barriers to entry - what is stopping us from entering the market

5. Marketing Goals

What are we trying to achieve for this period of time ahead?

• Expand into new markets?

• How many new customers?

• How many existing customers retained?

• How often to advertise a new menu?

• What niche market can we try to fill?

6. Marketing Strategy

The 7 P’s

• Product

• People

• Price

• Process

• Promotion

• Physical

• Place

7. Costing

• What does each of our product cost to make?

• What does each of our products sell for?

• What profit do we make from each?

Use this information for figuring our which products are pulling their weight and which products are not

The Marketing Mix (4 P’s)

Product, Price, Place & Promotion

• Mainly applied to goods

Product

The good or service that the business sells to meet the needs and wants of the target market

• Features

• Name

• Branding

• Quality

• Service

• Packaging

—> Branding

Creating a unique identity for a product or service so that customers can identify with it

Brand

Name, symbol or design that is used to identify a product and differentiate it from that of the competitor

—> Product Differentiation

Brands and Branding helps a business make its product stand out compared to competitors

• Quality

• Athletic

• Features

• Health

• Value

• Convenience

—> Brand Design

Brands must have unique elements to stand out

• Need to be Trademarked^TM to protect other companies from using it

—> Packaging

Used for the containment, protection, handling, delivery and presentation of goods

1. Primary - used to package the product as it is purchased

2. Secondary - used to package the product for display in the store

3. Tertiary - used to handle and transport the product

• Does the packaging protect the product?

• What does the packaging cost per item?

• What does the target market want?

• How can the brand be included?

• How to minimise waste/make packaging recyclable?

—> Labelling

1. To market the product (optional)

   • Slogans

   • Blurbs

   • Branding

2. To inform the consumer (if legally required)

   • Ingredients and origins

   • Nutritional information

   • Warnings

   • Expiry date

—> Market growth

• Market Penetration

  • selling more of the same goods/services to the same customers

• New market

  • sell the same goods/service to new market

• New product

  • sell new goods/services to your existing market

• Diversification

  • new products to new markets

Price

• How much do you need to charge to stay to cover costs?

• How much will consumers pay?

Pricing Strategies

1. Skim pricing

Setting a high price because customers are happy to pay more

2. Penetration pricing

Setting a low price to attract a higher number of customers

3. Psychological pricing

Odd-even pricing or pricing that is just below the a whole number value (e.g. $3.99)

4. Premium pricing

Setting the price above the market price to create a sense of exclusivity

5. Price leadership

Dictating when price should increase or decrease

6. Loss leadership pricing

Selling a product below cost

Promotion

The communication of information about the product to the target market

• Also attempts to influence the behaviour and attitudes of the consumer

Public relations

Managing the connections between businesses and their customers or clients

—> Promotional methods

—> Promotional strategies

• Push promotion strategy

  • retailers promote a product to customers

  • selling the product to the customer based on features etc.

• Pull promotion strategy

  • business promotes product to create demand for it

  • the customer demands the product

—> Branding

The brand itself can be used for branding

• Advertising method

  • celebrity endorsement

  • sponsoring events

  • brand recognition in public

  • product placements

  • release of new products

—> Technologies

• Print, TV and Radio

• The internet and gaming

• Digital POP Technology and hypertags

• Viral Marketing

• M-Commerce

• Social Media Marketing

Place

The method that the business uses to distribute the product of service to the consumers

• How the product gets from producer to consumer

  1. Manufacturer —>

     • makes the product or provides the service

  2. Wholesaler —>

     • buys from manufacturer, sells to retailer

  3. Retailer —>

     • sells to consumers

  4. Consumer —>

     • purchases based on the 4 P’s

• The internet is changing how these distribution chains work

The Extended Mix

People, Process, Physical, Performance

• How they apply to services

People (employees)

Staff that can relate to the market

• Focus on customers through workers who make them feel appreciated

• Marketing through

  • training, quality service, relationships

—> Relationship marketing

Staff build personal relationships with the customer base

• Employees feel like they are making a difference and work harder for their customers

• Customers feel valued and attracted to the positive Business Public Image (BPI)

Process

Procedures for great customer experience

• Focus on making the experience easier, quicker, more fun, more personal or using tech

• Marketing through

  • follow-through, interfaces, efficient processes

Physical

The physical presence of the business

• The unique feel of the store or the online space it exists in

• Key factors for EST

  • signage, webpage, staff uniform

Performance

Setting and monitoring some marketing objectives

• Measuring the performance of the business using Key Performance Indicators (KPI’s)

—> Sale revenue and returns

• Number of sales for each year and number of sales returns

• Customer queries per month

• Sales by segment (e.g. men vs women, WA vs globally)

• Increase or decrease in sales compared to last year

• Increase or decrease in sales after a marketing campaign

• Increase or decrease in sales after running an instore discount

—> Customer satisfaction

• Complaints per week

• Returning customers per year

• Calls received each day

• Time taken from placing order to customer receiving order

• Returns claimed for the year

• Average time spent on phone to solve customer issues

Customers and Competitors

Customer profiling

Collecting information about the businesses’ customers, who are the consumers wanting to buy their product or service

• Consumers are specific about their motives for purchases

• Same product or service does not appeal to every customer

• To profile customers

  • define the specific group of customers relating to the target market

  • gather data on a range of elements

  • e.g. demographics, location, lifestyle, behaviour, buying motives

Initial buying motive is usually to satisfy a need or want. Can purchase for rational or emotional motive

Competitor profiling

Collect information about competitors who are producing a similar good or service

• A lot of information may not be available in the public domain especially if not public company

• Can be developed by doing a SWOT analysis

• Simple competitor analysis compares main competitors along a range of elements

• Complex profile can be divided into analysis of management, marketing, operations, human resources and financing

  • what is the competitor’s mission statement and what does it reveal about the strategic plan of the business?

  • who makes the decisions?

  • how is the competitor positioned in the market?

  • are there any elements of their product development evident?

  • what are their human resource needs?

  • what is known about how the business if financed, assets it owns, and so on?

Customer Relationship Management (CRM)

Manage customer relations by providing good customer service

• Important because when done well

  • customer loyalty

  • repeat business

• The following customer service processes to be managed

  • customer queries

  • interactions

  • documentation of orders

  • follow-up

  • billing customers

  • after sale services

Relationship marketing

A business with a clear customer focus where customers are treated as individuals

• Staff build up a connection with customers

• Employees feel more positive and motivated in their workplace

• Customers benefit by receiving personalised service

CRM - Customer loyalty programs

Incentives that reward customers for repeating purchases, referrals, or other actions demonstrating loyalty, aiming to extend customer lifetime value and build stronger relationships

• Customer retention strategy - to encourage customers to continue buying

• Offer rewards like discounts, free offers, or other perks for repeat purchases or other loyalty related actions

• Goal is to build stronger, more profitable relationships

—> Incentives

Loyalty programs provide incentives for customers to engage with a brand and make repeat purchases

—> Data collection

Systems collect data about customer interactions and preferences, allowing for more personalised rewards and experiences to loyal customers

—> Personalised rewards

Based on the data collected, businesses can offer personalised rewards and experiences to loyal customers

—> Customer segmentation

CRM systems allow businesses to segment their customer base and target specific loyalty programs to different groups

Customer loyalty program benefits

• Increased customer retention

• Enhanced customer lifetime value

• Improved customer engagement

• Data driven insights

• Increased sales and revenue

CRM - Early adopter incentives

Australian Consumer Law (ACL)

Consumer Rights & Protection

The Employment Cycle