BETA EST
INTRO TO MARKETING
Process where companies create value for customers and build strong customer relationships in order to capture value from customers in return
Needs, Wants and Demand
Needs
Hungry → need food to survive
Wants
What wan to eat? → burger, pasta, rice? → these are wants → they all share same purpose of meeting ur need but which want do u wan to use to satisfy ur needs
Demand
I have both the money and desire to buy the burger → demand
There is demand when people wants something and that they are able to afford it → if people want smt but cannot afford, they wont buy it thus no demand for that product
Value
Customer’s evaluation of the difference between all the benefits and all costs of a market offering relative to those of competing offers
Total benefits (Tangible and intangible) / Total costs (Tangible and Intangible)
Tangible → things i can measure → cost of something, time spent on smt
Intangible → cannot measure → customer satisfaction, customer relationships
Essentially is like trying to prove that the product is worth the costs
Like if i go and eat food and pay lets say $10 for the meal, but I dont like the taste, the environment and service then to me the $10 i paid is not worth it
Think of it like this: You go to a restaurant. You pay money for your meal. The value you get is the taste, the experience, the satisfaction of eating good food. If you think the meal was worth the price, you've experienced good value.
The value I think I am getting
Satisfaction
Customer’s perceived performance matches expectations
Expectation > Performance → NOT SATISFIED
Expectation < Performance → SATISFIED
It's like when you order food at a restaurant - if the food is delicious and the service is great, you're satisfied. But if the food is cold or the waiter is rude, you're not satisfied.
How I feel about the product or service
Market
Place where actual and potential buyers meet actual and potential sellers
Essentially, malls, and e-commerce platforms
BUSINESS ENVIRONMENT
MICRO
Characteristics → close proximity to the company, factors directly impact one another
Company
Like the people, the equipment etc for running the business
Customers
The people who buy from you thus give u business duh
Suppliers
Provides the materials so that you can either use it to make ur product or they make the product for u to sell
Competitors
Other businesses that targets ur customers? → if u sell pizza, other pizza brands are ur competitors
Marketing intermediaries
Move products to the customers → often the middleman → retail stores, delivery services
MACRO
Political
Things that government does that can affect ur business
Taxes → u need to pay taxes which can decrease ur profits
Economic
Affects how much money people have to spend and how business makes money
Inflation → cost of products increase, cost of ur supplies increase
Social
People’s behaviours, attitudes and lifestyles
Example if u own clothing store → the fashion trends, their age group, cultural beliefs (like in terms of what is appropriate to wear, islamic people are more conservative while others are not as strict)
Technological
How tech changes the way things are done
My books business → Ebooks and online shopping → ppl can access online → affect sales
Environment
How the natural world affects the business and vice versa
Lets say ski resort → climate change → less snow → affects business
Natural disasters → disrupts business
Legal
Laws and regulations that businesses must follow → can affect how business operates, its costs etc
Employment laws → the minimum wage of workers, their health and safety
Demographics
Characteristics of ur target audience
Their age, gender, income level
Legal VS Political
Legal factors are the specific rules a business must follow. → talking about the laws itself and nth about how it was made
Political factors are the broader political climate in which those laws are created and enforced. → if the government is corrupt or instable → can lead to making biased laws → more on what causes the laws to be made
SWOT ANALYSIS → Rmb that it is centered around ur business
Strengths
Internal attributes that gives u the advantage
What is my business good at? What does my business do better than others?
Example, Starbucks → Strong brand image → a lot of people know starbucks and they have a loyal customer base
Weaknesses
Internal limitations that can hinder the organisation
What can you improve on?
Starbucks → high prices → people who are more budget conscious will avoid it, reliant on coffee → if coffee prices rise, their cost will increase
Opportunities
External factors that the business can leverage
What chances to take advantage of?
Starbucks → focus on health and wellness → produce more products that are so-called of healthier choice → attract people who are more health conscious
Threats
External factors that can harm the organisation
What challenges do you face?
Starbucks → Intense competition → other cafes like coffee bean that also sells either the same or similar products → people might convert to other brands, Economic downturns → lesser people are able to afford premium products which affects starbucks as they are known as a more premium brand for coffee
SEGMENTATION
Geographic Segmentation
Marketers collect and analyse information according to the physical location of their customers
Focusing on a certain area → if u sell winter clothes, focus on places which are colder
Demographic Segmentation
Population characteristics of their customers
Age, gender, income level → sell clothes → diff styles or designs for teens compared to adults
Psychographic Segmentation
Personalities, values, opinions, attitudes, interests and lifestyles
What they think and feel
How people spend their time, their hobbies, what they belief in → sports car → targets people who values status, excitement, likes cars, racing
Behavioural Segmentation
Uses and responses to product and services
How often they buy, what they buy, how much they spent
Occasions, Benefits sought, Usage rate, User status
Online clothing store → give discounts for people who havent purchased from them in awhile
Evaluating Market Segments
Segment size and growth
Most companies target the largest, fastest and most profitable segment however it is not always the most attractive as heavy resources may be required.
Size → kinda like the amount of people? So like the more people, the greater audience u can have and you may have a greater demand
Growth → how much the number of people increase → so is like how fast the number of ur target audience grows
Segment structural attractiveness
About the competitiveness and factors that affects the profitability
Are there strong, aggressive competitors, close substitute products?
Powerful suppliers that affects my bargaining power?
Bargaining power of the customers?
Easy for new competitors to enter the market?
A segment with low competition, high barriers to entry, and low buyer and supplier power is generally more attractive.
Analysis for the market of luxury smartphones
Competition: While there are competitors in this segment (e.g., OnePlus, Google Pixel), the market is dominated by a few major players with strong brand recognition.
Threat of new entrants: High research and development costs, strong brand loyalty, and distribution challenges make it difficult for new players to enter this segment.
Threat of new entrants: Relatively low, as consumers often have strong brand preferences and are willing to pay premium prices.
Bargaining power of suppliers: Moderate, as key components like high-quality displays and processors are essential, but there are multiple suppliers.
Threat of substitute products: Relatively low, as there are no direct substitutes for luxury smartphones
Company’s objectives and resources
Does company have skills and resources to succeed in the segment?
Does going after a certain segment match company’s long term objectives?
Objectives → what the companies aim to achieve
Resources → assets that a company can use to achieve its objectives
For example, a company aiming to increase market share (objective) might invest in advertising (resource) to reach a wider audience.
TARGETING STRATEGIES
Undifferentiated (Mass) Marketing
attempts to go for the whole market
Ignores segment differences and assumes market tastes are similar
Targets the whole market with one offer (mass marketing)
Through mass production, mass distribution & mass promotion to reach customers with the same products
To achieve economies of scale resulting in Potential savings on production/marketing costs
Essentially is jst trying to reach a large amount of people with the same thing
Coca-cola → have billboards, ads all on the same product → assumes that everyone likes soda and wiling to drink coca cola
Scbbbbb
Differentiated (Segmented) Marketing
Targets several market segments: You identify different groups of customers with different needs or preferences.
By designing a separate marketing mix for each segment: You create unique strategies for each group, including different products, pricing, promotions, and distribution channels.
Identifying distinctive difference across market segments: You understand what makes each group unique and cater to their specific needs.
Involves higher cost/investment compared to undifferentiated marketing: Creating different marketing strategies for each group requires more resources and money.
May lead to potential cannibalisation (of own market share): Sometimes, products designed for one segment might attract customers from another segment, reducing sales in that segment.
Car manufacturers
Luxury → people who want premium features, want status
Family → people who wants space, safety etc
Sports car → young, performance orientated individuals
Dfghj
Concentrated (Niche) Marketing
Targets a large share in 1 or 2 segments
Strong presence → be the go to brand in that segment
Understand the wants and needs of the segment better than anyone else
Good for business with limited resources as you can pour everything into focusing one that one segment
Strong positioning is crucial
Helps small firms compete with bigger firms
An example is a bakery selling gluten-free baked goods → targets people who cannot take gluten or are sensitive to it
Micro marketing
Sees the individual in every customer rather than see a customer in every indivudal
Knowing your customers: Businesses collect information about you to learn what you like and dislike.
Personalized offers: They use that information to suggest things you might be interested in.
Building relationships: By offering things you want, businesses hope you'll become a loyal customer.
Amazon → tracks ur purchases (getting info about u), personalised recommendations (Based on prev purchased), targetted offers (gives u promo or discounts on times that you might be interested in)
CRAFTING A POSITIONING STATEMENT
Summarizes the company’s or brand’s positioning in a clear, distinctive and desirable manner
“For [target segment anad need] our [brand] is [concept] that [point of difference].”
Example: “For [people seeking wellness], [The Body Shop] offers [the most comprehensive range of natural bath and cosmetic products] that [made us the most environmentally-friendly cosmetics company].
Ertyuio
Concept VS point of difference
The concept is the core idea of your product or service, while the point of difference is what sets your product or service apart from the competition.
Concept: A smartphone
Point of difference: A smartphone with a long-lasting battery life
In this example, the concept is the smartphone itself, while the point of difference is the long-lasting battery life. This is what makes the product stand out from other smartphones on the market.
POSITIONING MAPS
Show customer perceptions of their brand vs competing products on important attributes
A brand’s positioning must serve the needs and preferences of well-defined target markets
Identify gaps in the market: If there is a large empty space on the map, it may indicate an opportunity for a new product or service.
Reposition a brand: If a brand is positioned too close to competitors, it may need to be repositioned to differentiate itself.
Develop a stronger brand image: By understanding how customers perceive a brand, marketers can develop messaging and campaigns that reinforce the desired brand image.
PRODUCTS
Levels of a product
Core
“What is the customer really buying?”
This is the most basic level of a product and is the reason why people buy it. For example, the core benefit of a car is transportation.
Actual
“What exactly are the customers paying for?”
This is the physical product that people buy. It includes the features, design, and quality of the product.
For example, a car's actual product might be a sedan with a V6 engine, leather seats, and a sunroof.
Augmented
“What else can we provide to delight our customers and differentiate ourselves from the competition.
This is everything that goes beyond the actual product to make it more appealing to customers. It can include things like warranties, customer service, and financing options.
For example, a car's augmented product might include a five-year warranty, roadside assistance, and a low-interest financing plan.
Types of consumer goods
Convenience goods
Usually low priced, purchased frequently, little comparison usually due to routine purchase
Example: Grocery, Toiletry, Haircut
You're running out of milk. You quickly grab a carton at the nearest store without comparing prices or brands. That milk is a convenience good.
A consumer product consumers usually buy frequently, immediately, with minimal comparison and buying effort
Shopping goods
Bought less frequently compared to convenience goods, higher priced, consumers tend to compare prices and read reviews
Example: Apparel, Tech products, furniture, renovation
Essentially, shopping goods are items that you think about and compare before buying, unlike convenience goods which are purchased quickly.
A consumer product that consumers, in the process of selecting and purchasing, usually compares on such attributes as suitability, quality, price, style
Specialty goods
Low purchase frequency, high price or emotional attachment, unique product features, and special effort required to purchase them.
Example: Wedding ring/gown, properties
Essentially, specialty goods are those items that consumers have a strong preference for and are willing to make extra effort to obtain.
Unlike convenience or shopping goods, people are often very specific about the brand or type of specialty good they want. They might be willing to travel long distances or pay a premium price to get the exact item they desire. They have unique characteristics or brand identities that make them stand out from the competition.
A consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase.
Unsought goods
Passive purchase, generally not thought of until a need for it arises
Example: Funeral services, insurance, charity and donations
Basically, unsought goods are things you don't think about until you need them or become aware of them. Marketers often have to work extra hard to convince people they need these products.
A consumer product that the consumer either does not know about or knows about but does not normally consider buying.
PLACING STRATEGY
Marketing channels
refer to the pipeline of organisations involved in the process of making a product or service available for use or consumption by consumers or businesses. Sometimes we call them marketing intermediaries
Marketing functions
Transactional
Contacting/Promotion
Negotiating → A retailer negotiates with a supplier to purchase a certain quantity of products at a specific price, with agreed-upon delivery dates and payment terms.
Risk Taking → Assuming the risk of owning inventory that might not sell.
Logistical
Physical distribution → Imagine you're baking cookies at home. Physical distribution would be how you get those cookies from your kitchen to your friend's house.
Storing → process of holding goods in a warehouse or storage facility until they're needed. It's like keeping your groceries in the fridge until you're ready to cook them.
Sorting → process of organizing and categorizing products to prepare them for shipment. It's like putting your clothes into different piles based on where they need to go (dirty clothes, clean clothes, laundry).
Facilitating
Researching → It involves gathering, analyzing, and interpreting information to understand customer needs, market trends, and competitor activities.
Analyzing customer feedback: This includes monitoring customer reviews, social media comments, and customer complaints.
Financing → banks
CHANNEL STRATEGIES
Intensive
Intensive distribution is a strategy where a product is made available in as many outlets as possible. The goal is to achieve maximum market coverage and ensure the product is easily accessible to consumers.
Product availability: The product is widely available across various retail channels.
Market saturation: The aim is to flood the market with the product.
Consumer convenience: Customers can purchase the product easily without much effort.
High inventory levels: Requires efficient logistics and supply chain management.
Fast-moving consumer goods (FMCG): Soft drinks, snacks, candy, and toiletries.
Convenience goods: Milk, bread, and newspapers.
Selective
Selective distribution is a marketing strategy where a product is sold through a limited number of carefully chosen retailers or wholesalers. It's a middle ground between intensive and exclusive distribution.
Limited number of outlets: The product is available in a select group of stores.
Control over distribution: The manufacturer maintains some control over the distribution process.
Prestige and image: This strategy can help maintain a product's image and exclusivity.
Specialized retailers: Often involves partnering with retailers that have expertise in selling the product.
Consumer electronics: Brands like Sony or Samsung might choose specific electronics retailers.
Apparel: Designer clothing brands often use selective distribution to maintain exclusivity.
Automotive: Car manufacturers typically use a selective distribution network of dealerships.
Exclusive
Exclusive distribution is the most restrictive form of market coverage. A manufacturer grants a single retailer or distributor the exclusive right to sell a product within a specific geographic area.
Single channel: Only one intermediary is allowed to sell the product.
Limited market coverage: The product is available in a restricted number of locations.
Prestige and exclusivity: Creates a perception of luxury and exclusivity.
Strong control: The manufacturer maintains high control over the distribution process.
Luxury cars: Brands like Rolls-Royce often use exclusive dealerships.
High-end fashion: Designer brands may limit distribution to specific boutiques.
Specialized products: Products with unique technical requirements might be sold through exclusive distributors.
PRICING STRATEGIES
Pricing decisions takes into consideration internal and external factors
Price ceiling → Highest possible price your target customers are willing to pay
Price floor → Lowest possible you are willing to accept for your products and or services
Internal → Marketing objectives, Marketing Mix, Costs, Organisational considerations
Marketing objectives
The goals of a company will affect the pricing of the product → if I wan to maximise profits, I will try to price as high as possible within my means. If I wan like to ensure sales I will probably put the price lower than my competitors.
Marketing Mix
The strategies used for other P’s can affect my price → lets say the goods im selling is a specialty goods the ofc my price for the product will be higher
Costs
The higher the costs, the higher I need to price m product in order to make ends meet
Organisational Considerations
Depends on how the company’s department that is in charge of pricing wants to achieve
External → Nature of market and demand, Competition, Environmental factors
Nature of market and demand
Market → a lot of people in the area?
Demand → how many people is interested in buying my product?
If there is a lot of people but low demand then would I sell it at a lower or higher price? Maybe lower so its more attractive?
If there is not much people but high demand then I will probably sell it at a higher price to make the most out of my sales
Competition
How they price their products will affect how we price also
If lets say they price damn high then of course we will price lower so people are more attracted
Environmental factors
The surroundings that might affect the sales
If lets say covid period people all wan buy masks then the price of my masks go up because everyone wants to stay safe what
Product life cycle
Introductory
This is when the product is launched. Sales are typically low, and the company invests heavily in marketing and promotion to create awareness.
Low sales volume: Initially, sales are typically low as consumers are unaware of the product.
High marketing costs: Significant investments are made in advertising, promotion, and public relations to create awareness and build demand.
Limited distribution: The product may be available in only a few outlets.
Price skimming or penetration pricing: Companies may choose to either charge a high price to recover development costs (skimming) or a low price to gain market share (penetration).
Focus on early adopters: Marketing efforts target innovators and early adopters who are willing to try new products.
Growth
Sales start to increase rapidly as the product gains popularity.
Profits begin to rise, and competitors may enter the market.
Rapid sales growth: Demand for the product accelerates as more consumers become aware of it.
Expanding distribution: The product becomes available in more retail outlets.
Increased competition: Competitors may start to enter the market.
Price stabilization or reduction: Prices may be maintained or slightly reduced to attract a wider audience.
Focus on building brand loyalty: Efforts shift towards creating a strong brand image and customer loyalty.
Maturity
Sales growth starts to slow down as the market becomes saturated.
Competition intensifies, and prices may need to be adjusted.
Stabilizing sales: Sales growth begins to level off and eventually plateaus.
Intense competition: The market becomes saturated with competitors offering similar products.
Price competition: Prices may decline due to increased competition.
Focus on market share: Companies strive to maintain their market position and defend against competitors.
Product diversification: Introducing new features or variations of the product to stimulate demand.
Decline
Sales begin to decline as the product becomes outdated or is replaced by newer options.
The company may decide to discontinue the product or reposition it.
Decreasing sales: Sales drop rapidly as consumer interest wanes.
Reduced profits: Profit margins shrink as costs remain relatively constant.
Limited distribution: The product is available in fewer outlets.
Reduced marketing support: Marketing efforts are scaled back or eliminated.
Product phase-out: The company may decide to discontinue the product or reposition it.
Pricing strategies
Market skimming
Start with a high price and slowly adjust price of products downwards
Consumers are excited over the new product and those who wanted to have first hand experiences of the product/ services would not mind paying a higher price for it.
Apple is a classic example of a company that frequently employs market skimming. When they introduce a new iPhone model, they initially set a high price to capitalize on early adopters who are willing to pay a premium for the latest technology. Over time, as the product life cycle progresses and competition intensifies, Apple typically reduces the price of the older model to attract a broader customer base. This strategy allows them to capture different market segments and maximize overall revenue.
Market penetration
Start with a low price and slowly adjust price of products upwards.
Consumers are not sure of the product/service they are buying. In order to induce trial and adoption, businesses start by charging a low price and after a period of time adjust price upwards.
Companies like Samsung and Xiaomi often introduce budget-friendly smartphone models to capture a larger market share.
By offering affordable devices with essential features, they aim to attract price-sensitive consumers who might not be able to afford flagship models.
Product line pricing
Have different prices for different lines of product offerings.
Recognises the different customer segments in the market. Businesses came up with different tiers of pricing for different configurations of product/ service offerings.
The hotel industry is another excellent example of product line pricing. Hotels often offer various room categories to cater to different customer segments and budgets.
Economy rooms: These are basic rooms with limited amenities, priced competitively for budget-conscious travelers.
Standard rooms: Offer more comfort and amenities than economy rooms, at a higher price point.
Deluxe rooms: Provide enhanced features and amenities, targeting business travelers or leisure guests seeking luxury.
Suites: These are the most expensive rooms, offering spacious accommodations and premium services.
Optional pricing
Have a base price for product/service offering. Add-ons will come with additional prices.
Recognises the need for customisation. Charging for add-ons allow customers to choose and pay for what they need.
Airlines: Basic airfare is offered at a lower price, but passengers can pay extra for checked baggage, seat selection, or in-flight meals.
Product Bundle Pricing
Price a bundle of products as a package; usually cheaper compared to buying them separately.
Recognises the need for a bargain in customers. Bundles will help generate sales of other slower moving products which otherwise customers may not buy separately.
Fast food restaurants: Offering meal deals with a burger, fries, and a drink.
Captive pricing
Price a base product low (i.e. getting a low margin) and its refills or replenishments at a higher price (i.e. getting a higher margin).
Encourage the adoption of the product by not charging a high margin. Profiting on the repeat purchase allow businesses to build long-term relationship with their customers, realising repeated streams of income.
Printers and ink cartridges: Printers are often sold at a low price, but ink cartridges are expensive.
Psychological pricing
Price a product/service at a specific price point that creates a psychological effect of a bargain. (Example: $199, $2, $5, etc.)
Facilitate the purchase of a product/ service by working around the reference prices of customers. If the majority of customers are willing to pay $200 for a product, pricing it at $199 or $195 provides a psychological effect of a bargain; leading to easier conversion.
Odd-even pricing (Value shop, Uniqlo): Setting prices just below a round number (e.g., $9.99 instead of $10). This creates a perception of a lower price.
PROMOTIONAL STRATEGY
3 Goals in marketing communications
Informing
Increasing awareness of the new brand, product type and or attribute
Explain how the product works
Suggest new uses for the product
Persuading
Encourage the brand-switching
Changing customers’ perception of the product attributes
Influence customers to buy now
Reminding
Remind customers that the product might be needed in the future
Remain where to buy
Maintain customer awareness
TOFU
At this stage, people are just starting to explore their options and are not ready to buy yet. The goal is to generate awareness and interest.
Content marketing: Creating blog posts, articles, and videos that provide value and information to the target audience.
SEO: Optimizing your website for search engines to increase visibility.
You see a cool new pair of sneakers on Instagram. You didn't know about the brand before, but now you're interested.
MOFU
At this stage, people are considering their options and comparing different brands. They're starting to think, "Okay, this product looks interesting, but what about the others?"
Your job: Provide more information to help them decide that your product is the best choice.
Free trials or demos: Let people try your product before buying.
Case studies and testimonials: Share success stories from happy customers.
Educational content: Provide in-depth information about the problem your product solves.
BOFU
This is the final stage of the marketing funnel where people are ready to buy. They've done their research, compared options, and are now deciding which product to choose.
Think of it as the checkout line at a grocery store. People have picked out their items and are ready to pay.
Your job: Persuade them to choose your product over competitors and complete the purchase.
Clear calls to action: Tell people exactly what to do (e.g., "Buy Now," "Add to Cart").
BASIC PROMOTIONAL TOOLS
Advertising
Advertising refers to any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor.
Sales promotion
Sales Promotion provides short term incentives to encourage purchase or sales of a product or service
Direct marketing
Direct Marketing establishes direct communication with selected target consumers to both obtain an immediate response and cultivate lasting relationship with customers
Public relations
Public Relations focus on building good relations with the company's various publics by obtaining favourable publicity, building good corporate image, and handling or heading off unfavourable rumours, stories and events.
Personal selling
Personal Selling involves a process where personal presentation by the sales force encourages sales and building customer relationships.
KEY COMPONENTS OF ONLINE MARKETING STRATEGIES
Searching marketing
Gaining online presence and traffic through usually through paid strategies (i.e. Google AdWords, Bing, Yahoo, etc.)
Search engine optimisation
An organic strategy to optimise the visibility of a site or online content through the use of keywords
Social media
A digital platform that allows users to create and share posts. (I.e. Facebook, Instagram, TikTok, LinkedIn, Twitter, etc.)
Video
A recording of moving visual-audio medium that can be broadcast and playback. (I.e. YouTube, Vimeo, etc.)