HSC Marketing Lecture Notes
Strategic Role of Marketing Goods and Services
Marketing Definition: Marketing is the process of developing a product and implementing a series of strategies aimed at correctly promoting, pricing, and distributing the product to a group of customers.
Revenue Enhancement: Marketing serves as a method of enhancing revenue streams and increasing market awareness of specific products.
Customer Orientation: A business needs to see itself as a customer-satisfying process rather than a production process. Information about customers should be the central focus of the marketing plan.
Marketing Plan: This is a document that lists activities aimed at achieving particular marketing outcomes in relation to goods or services. It provides a template for future action aimed at reaching business goals, such as profit maximisation, and outlines strategies to bring the buyer and seller together.
Key Areas of Strategic Marketing Impact:
Choice: Businesses differentiate themselves from competitors through price, product quality, features, and service levels.
Standard of Living: Businesses develop and market products that improve and enhance the standard of living for consumers.
Brand Awareness: The extent to which customers are aware of a product or brand and its specific features.
Market Share: The attempt to develop, promote, and price products to a standard that secures more customers than competitors.
Case Study: Qantas Strategic Marketing
Effectiveness Factors: Qantas utilizes its marketing plan to:
Achieve overarching business goals.
Identify and satisfy specific customer needs.
Manage a changing environmental landscape.
Encourage new product development.
Emphasise market segmentation.
Create more distribution outlets.
Focus heavily on market research.
Interdependence with Other Key Business Functions
The Marketing Concept: A business philosophy stating that all sections of the business are involved in satisfying a customer's needs and wants while simultaneously achieving the business’s goals.
Operations:
Concerned with the manufacturing process of goods.
Collaborates with marketing to incorporate product features that consumers respond to positively.
Qantas Constraint: Operations may constrain marketing by establishing physical limits, such as flight scheduling and the rollout of initiatives like online check-ins, new inflight entertainment, or lounge upgrades.
Finance:
Determines if potential customer needs are financially viable to pursue.
Establishes budgets and forecasts for promotional campaigns.
Interdependence at Qantas: Finance depends on marketing to generate funds. Marketing strategies (e.g., new lounges or new carriers in Asia) are expensive and require funding. Strategies are judged using financial criteria.
Human Resources (HR):
Staff must be motivated and skilled to develop products that cater to customer needs.
The marketing process helps determine the skills required for employees to produce the desired product.
Interdependence at Qantas: Marketing aligns with HR to develop job descriptions and design training programs to ensure the right staff create services that satisfy consumers.
Evolution of Marketing Approaches
Production Approach:
Focus: Production of goods and services based on mass production techniques.
Philosophy: Customers seek goods based on quality levels; emphasis was on production consistency and standards.
Selling Approach:
Focus: Strategies aimed at convincing consumers to buy due to increased competition.
Methods: Stimulating demand via advertising in electronic media (radio and film).
Flaw: Neglected customer needs in favor of producing what the company could make, then using sales reps to create demand.
Marketing Approach:
Focus: Placing the customer at the center of all activities.
Method: Finding out what customers want through research and then satisfying that need.
Recent Modifications (Last 3 Decades):
Corporate Social Responsibility (CSR): Increased demand for ecologically sustainable products.
Customer Orientation: Collecting customer information to base decisions on their wants and interests.
Relationship Marketing: Developing long-term, cost-effective relationships with individual customers to foster brand loyalty and repeat sales.
Types of Markets
Market Definition: A group of individuals or organisations that need/want a product, have the purchasing power, are willing to spend, and are socially/legally authorised to purchase.
Resource Market: Sale and production of raw materials (e.g., mining, agriculture, forestry). Examples: BHP Billiton, Rio Tinto.
Industrial Market: Businesses purchasing products for use in production or daily operations. Example: Toyota.
Intermediate Market: Wholesalers and retailers who buy finished products to resell for profit.
Consumer Market: Businesses selling directly to individuals.
Mass Market: Seller mass-produces, distributes, and promotes one product to all buyers (e.g., petrol, electricity, water, postal services).
Niche Market: A narrowly selected target market segment.
Factors Influencing Customer Choice
Psychological Factors:
Perception: The opinion a customer has about a product.
Motivation: Internal motives such as comfort, health, safety, taste, and social approval.
Attitude: Overall feeling about an object or activity.
Personality and Self-image: How a person characterizes themselves and views themselves.
Learning: Changes in behaviour caused by information/experience, often leading to brand loyalty.
Sociocultural Factors:
Social Class/Socioeconomic Status: Based on education, income, and occupation.
Culture: Everyday attitudes and values infiltrating buying behaviour.
Family/Gender Roles: Research shows women often make decisions for healthcare and food; children influence household purchases.
Peer Groups: Identification with groups where attitudes and values are adopted.
Economic Factors: Impacts capacity to compete and consumer willingness to spend.
Boom: Low unemployment, rising incomes, optimism, increased production, and intensified promotion.
Recession: High unemployment, falling incomes, lack of confidence, price-consciousness, and focus on product functionality/value.
Government Factors:
Fiscal Policy: Impacts taxation levels (Income Tax and GST).
Monetary Policy: Influences interest rates and access to credit.
Social Role: Age restrictions and censorship warnings.
Influences Applied to Qantas and Jetstar
Perception Management: Qantas is perceived as luxury/classy (Premium), while Jetstar is seen as low-cost, fun, and accessible for younger audiences.
Motivation: Qantas highlights its safety record and Australian heritage. Brand ambassadors like John Travolta and Hugh Jackman promote the Qantas brand.
Dual Brand Strategy: Qantas targets the brand-conscious; Jetstar targets the price-conscious.
Negative Public Opinion Issues: Qantas must manage negative perceptions following outsourcing (industrial unrest) and maintenance concerns/mid-air incidents.
Experience & Learning: Flying Qantas provides a high-quality experience encouraging brand loyalty. Jetstar passengers learn to accept compromises for cheaper fares.
Sociocultural Adaptations: Qantas has diversified on-board menus for international cultures. Jetstar targets younger families with "family-friendly" campaigns.
Economic Impact: Global instability and disasters have driven price-consciousness, leading to the growth of Jetstar on domestic and international routes.
Consumer Laws and Marketing
Competition and Consumer Act 2010: Protects against undesirable business practices and regulates trade practices.
Deceptive and Misleading Advertising:
Bait and Switch: Advertising low-priced items that run out to direct customers to higher-priced items.
Dishonest Advertising: Overstating benefits or providing misleading info about features or origins.
Price Discrimination: Giving preference to some retailers by providing lower prices than offered to competitors. Prohibited unless justified by bulk orders.
Implied Conditions: Unspoken terms, most notably "acceptable quality" (fit for purpose, free from defects, safe, durable).
Warranties: Promises to correct defects. Mandatory refunds if products are faulty, do not match descriptions, or fail the intended job.
Ethical Influences in Marketing
Ethical Criticisms: Materialism (creation of needs), gender stereotypes, sex in advertising, invasive product placement.
Truth and Accuracy: Avoiding "concealed facts" (omissions), "puffery" (exaggerated praise), and vague/ambiguous statements.
Health Concerns: Promotion of junk food to children via digital sites/apps.
Fair Competition: Monitored by the ACCC. Unfair practices include:
Price-fixing: Collusion between competitors to reduce competition.
Long-term Loss Leader: Undercutting smaller rivals to force them out of business.
Sugging: Selling Under the Guise of a Survey. Raises privacy and deception issues.
Qantas Ethical and Legal Issues
Compliance: All material is reviewed by the Qantas Legal Department for the Competition and Consumer Act.
Environmental Responsibility: Boxed meals to reduce waste; solar energy for lighting/AC to reduce greenhouse gases; noise abatement committees; Landcare Australia partnership.
Legal/Ethical Challenges:
ACCC Action: Jetstar accused of misleading advertising for undisclosed booking fees.
Price Fixing: Fined millions for fuel purchaser collusion on US cargo flights.
Anti-competitive Behaviour: Accused of increasing seat capacity beyond demand to ensure rivals were not profitable.
Ambush Marketing: Accused of this during the Sydney Olympics.
The Marketing Process: Situational Analysis
SWOT Analysis:
Strengths (Internal): Multi-brand strategy (Qantas/Jetstar), Oneworld Alliance, domestic market share ( corporate), globally recognized logo, safety record, loyalty program.
Weaknesses (Internal): Profitability falls, high-risk industry, complex fleet, high labour costs, industrial disputes, tarnished image from safety incidents.
Opportunities (External): Jetstar Asia expansion, E-commerce growth, Asian Pacific aviation growth, new aircraft technology.
Threats (External): Domestic competition (Virgin Australia, Tiger Airways), international competition (Asian/Middle Eastern carriers), fuel cost increases, falling Australian dollar.
Product Life Cycle (Qantas/Jetstar Examples):
Introduction: Jetstar Japan (). Focus: heavy promotion, penetration pricing, building awareness.
Growth: Jetstar Pacific Vietnam. Focus: increasing sales, profitability, and fleet size.
Maturity: Jetstar (Australia) and Qantas (Domestic). Sales levelling off. Focus: cost-cutting (B787s), lounge upgrades, reduced prices to meet competition.
Renewal: Qantas International. Focus: Emirates/China Southeastern partnerships, exiting loss-making routes.
Decline: Jetstar Asia (Singapore). FY14 loss of million. Focus: suspending growth until market stabilizes.
Market Research and Objectives
Systematic Collection: Includes determining info needs, collecting data, and analysis.
Primary Data: Original sources. Methods: Surveys (interviews/questionnaires), Observation (spending habits), Experiments (test marketing).
Secondary Data: Internal (sales reports) and External (ABS statistics, magazines).
Qantas Research: Uses in-flight surveys, complaint monitoring, and secondary sources like Choice surveys ( subscribers) and Roy Morgan reports.
SMART Objectives: Specific, Measurable, Achievable, Realistic, Timely.
Qantas Objectives: Maintain combined share, load factors at , grow frequent flyer members, and transform international operations through "right aircraft, right route."
Marketing Strategies and Implementation
Marketing Mix (4 Ps):
Product: Quality, packaging, branding, and intangible benefits (prestige).
Price: Set above, below, or near competitors; influenced by production costs and demand.
Promotion: Advertising, personal selling, sales promotion, and public relations.
Place: Distribution channels; storage and transport.
Implementation and Monitoring: Checking actual progress through Key Performance Indicators (KPIs).
Financial Forecasts: Predicting sales potential and revenue vs. costs.
Analysis Types:
Sales Analysis: Comparing actual vs. forecasted sales.
Market Share Analysis: Comparing performance against rivals.
Marketing Profitability Analysis: Breaking down total costs into specific activities to assess effectiveness.
Qantas Strategy Revisions: 2004 launch of Jetstar to counter Virgin Blue; simplification of domestic fares; axing Australian Airlines brand; cancelling plane orders and lowering prices to stimulate demand during downturns.