MARKETING

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MARKETING

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Title: MARKETING

1
MARKETING MANAGEMENT
2
Definition of Marketing

the process of planning and executing the
conception, pricing, promotion, and distribution
of ideas, goods, and services to create exchanges
that satisfy individual and organizational
objectives.

E.g. Vitasoy

Exchange
a process by which two or more persons give and
receive something of value.

5
The Marketing Concept -Focus on the Customer

Market focus
Customer orientation
Co-ordinated marketing
Profit seeking

6
Drawbacks of Marketing Concept

ignores public
influences values ideas

7
Recent Development-- Societal Marketing Concept

Concerns public welfare and social responsibility
e.g. CLP

8
The role of Marketing

Marketing Analysis
Marketing Planning
Marketing Implementation
Marketing Control

9
Marketing Research
10
Marketing Research

Gathering, recordingand analysis of data
to solve a specificproblem that is tooimportant
to be answered by guessing
an informational input to decisions

11
What M.R. can tell ?

How satisfied the consumers are
How products are perceived
Evaluate the sales potential
Determine the effectiveness of ad
Predict the impact of price changes

12
The Marketing Research Process
Defining the Problem Research Objectives
Developing the Research Plan
Implementing the Research Plan
Interpreting and Reporting the Findings
13
1. Defining the problem and research
objectives

to find out the real problem but not the symptom
set the research objectives
research approaches
exploratory
descriptive
causal

14
Examples
15
2. Developing research plan

Determine specific information needs
Source of information
secondary data
Internal
External
primary data

16
Benefits and Limitations of Secondary Data

Benefits
Low cost
Less effort
Less time
Sometimes more accurate
Some information only from secondary sources

Limitations
Collected for other purpose
No control over data collection
Potential accuracy problem
May not be reported in required form
May be outdated
May not meet requirements
A number of assumptions made

Planning primary data collection
research approach
contact methods
sampling plan
research instruments

18
Research approach

Observational research
survey research
focus group
experimental research

19
Contact methods

Telephone survey
mail questionnaires
personal interviews

20
Sampling plan

sampling unit
sampling size
sampling procedure

21
Sampling Techniques

Probability Sampling
All population members have a known probability
of being in the sample
Simple Random Sampling
Each population member, and each possible sample,
has equal probability of being selected
Stratified Sampling
The chosen sample is forced to contain units from
each of the segments or strata of the population

22
Sampling Techniques (Contd.)

Cluster Sampling
Involves dividing population into subgroups
Random sample of subgroups/clusters is selected
and all members of subgroups are interviewed
Very cost effective
Useful when subgroups can be identified that are
representative of entire population

23
Research instrument

The most common instrument is questionnaire
what questions to ask
question structure
wording of question
order of question

24
Implementing the research plan

collecting and analyzing data

25
Interpreting and reporting the finding

Interpret the findings, draw conclusions and
report to management
the manager willutilize these findingsto make
decisions

26
Customer Behaviour
27
Consumer behaviour

refers to the buying behaviour of final consumers
it includes the analysis of factors that
influences purchase decisions and product use

28
Definition

Consumer behaviour studies how individuals,
groups,and organizations select, buy, use, and
dispose of goods, services, ideas,or experiences
to satisfy their needs and desires.

29
Consumer Behaviour
Marketing and other stimuli
Buyers black box
Buyers response
30
External factors

1. Culture

2. Social factor
- reference groups

3. Family

4. Salesperson

5. Advertising
e.g. Fancl

6. Situation

36
Internal factors

1. Perception
the process by which we select organize and
interpret these stimuli into a meaningful and
consistent picture

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2. Motivation

to fulfill some kind of need

Self-actualization Needs
Esteem Needs
Esteem Needs
Social Needs
Security Needs
Physiological Needs
41
3. Learning

creates changes in behaviour through experience
and practice

42
4. Attitude

Consistently favourable or unfavourable
evaluation, feelings and tendencies toward an
idea.

43
5. Personality

refers to the unique psychological
characteristics that lead to relatively
consistent and lasting responses

E.g. Vita Distilled Water
44
6. Demographic factors

such as age, sex, income, education, occupation,.

45
Industrial Buying behaviour
46
Industrial market

Consists of all the individuals and organizations
acquiring goods and services that enter into the
production of other products and services that
are sold, rented, or supplied to others

47
Types of buying situations

Straight rebuy
modified rebuy
new task buying

48
Industrial buying process

Recognise the problem
determine product needs and describe product
specifications
search for suppliers
assess and select suppliers
evaluate overall performance

49
Participants in the industrial buying process

Users
influencers
buyers
deciders
gatekeepers

50
Factors affecting industrial buying behaviour
External factors

Level of demand
economic outlook
budget constraints
supply conditions
political/legal and competitive environmental
changes
rate of technological change

51
internal factors

Organizational influences
interpersonal influences

52
Differences between consumer market and
industrial market
Buying motive

Industrial market
Businesses do not buy products for final
consumption. Instead, they make purchases to be
used directly or indirectly in meeting the needs
of final consumers.

Consumer market
For direct consumption

53
Differences between consumer market and
industrial market
Size of purchase

Industrial market
Tend to be larger

Consumer market
Tend to be smaller

54
Differences between consumer market and
industrial market
Frequency of purchase

Industrial market
Less frequent

Consumer market
More frequent

55
Differences between consumer market and
industrial market
Buyer-seller relationship

Industrial market
Stable and long term relationship with seller

Consumer market
Businesses that produce products for sale to
final consumers often have little contact with
customers

56
Differences between consumer market and
industrial market
Product

Industrial market
More complex, customized product support is
critical.

Consumer market
Less complex, standardized product support is
important

57
Differences between consumer market and
industrial market
Price

Industrial market
Competitive bidding and negotiation list prices
on standard products

Consumer market
List prices

58
Differences between consumer market and
industrial market
Distribution

Industrial market
More direct (shorter)

Consumer market
Less direct (longer)

59
Differences between consumer market and
industrial market
Promotion

Industrial market
Emphasis on personal selling

Consumer market
Emphasis on advertising

60
Marketing Strategies
61
Marketing strategy

the plan of action for accomplishing the
marketing objectives
consists of
specific strategies for target market
marketing mix
marketing expenditure level

62
Analyze and select target market

Market
the set of all actual and potential buyers of a
product

steps of selecting target market
market segmentation
market targeting
market positioning

64
Step 1
Marketing Segmentation
65
Market segmentation

the act of dividing large, heterogeneous
(dissimilar) markets into smaller, homogeneous
(similar) submarkets.

66
Advantages of segmentation

Precise market definition
better analysis of competition
rapid response to changing market needs
effective resources allocation
effective strategic planning

67
Dimensions for segmenting consumer markets

Geographic segmentation
dividing the market into different geographical
units.

68
Demographic segmentation

dividing the market into groups based on
variables like age, sex, family size, family life
cycle, income, occupation, education, religion,
race, nationality,
popular because of
consumer needs vary closely with demographic
variables
easier to measure

69
Psychographic segmentation

based on social class, lifestyle, or personality
characteristics

70
Segmentation by benefits

base on what a product will do rather than
consumer characteristics

71
Criteria for effective segmentation

Substantial enough to serve
Accessible by marketing means
Differentiable
conceptually distinguishable and responding
differently

Actionable
effective programs can be designed for
attracting target customers
Measurable
size of market segment, purchasing power and
profile of target customers

73
Step 2
Market Targeting
74

to reveal the firm market-segment opportunities
to evaluate the various segments
segment size and growth
segment structural attractiveness
company objectives and resources

75
Undifferentiated marketing

A firm decides to ignore market segment
differences and go after the whole market with
one offer. E.g. McDonald

76
Differentiated marketing

A firm decides to target several market segments
and design separate offers for each
E.g. Giordano men, ladies

77
Concentrated marketing

A firm goes after a large share of one or a few
sub-markets.
Selected segments
Specific products
Specific markets

78
Step 3
Market Positioning
79
Market positioning

to arrange for a product to occupy a clear,
distinctive and desirable image relative to
competing products in the minds of target
consumers.

Purpose
to reinforce or develop an image concerns a
product in customer mind

81
Ways of positioning

Product features
product benefits
associating the product with a use or application
user category

82
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Steps of positioning

1. Identifying a set of possible competitive
advantages
2. Selecting the right competitive advantages
3. Communicating and delivering the chosen
position to the market

84
Marketing Mix
85
Marketing Mix

the set of controllable marketing variables that
the firm blends to produce the response it wants
in the target market
4 Ps
product
price
place
promotion

86
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87
Product
88

A product is anything that can be offered to a
market for attention, acquisition, use, or
consumption and that might satisfy a want or need
3 levels of product
core product
actual product
augmented product

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90
Product Classification

Convenience goods
Shopping goods
Specialty goods
Unsought goods

91
Classification of consumer goods
92
Individual product decisions

Product attribute decisions
Brand decisions
Packaging decisions
Product-Support decisions

93
Product Line Decisions

A product line is a group of products that are
related in function, customer-purchase needs, or
distribution channels.

94
Product mix decisions

the set of all product lines and items that a
particular seller offers for sale
4 dimensions
width
length
depth
consistency

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96
How new is new?

New to the world
New to the firm
Product line extensions
Product improvement
Product modification

97
Why does a company need new products?

Obtain greater profits/ROI
Capture larger market share
Meet customers changing needs tastes
Shorter product life cycle
Build competitive advantages
Planned obsolescence

98
New product development

Steps
Product idea generation
Product idea screening and product concept
development
Business analysis
Product testing
Market testing
Commercialization

99
Product life cycle (PLC)

the course of a products sales and profit over
its lifetime
4 stages
introduction
growth
maturity
decline

100
Sales
Sales and profit
Profit
Introduction
Growth
Maturity
Decline
Time
101
Introduction Stage

slow sales growth
profit are nonexistent
high promotion spending
a few competitors
usually focus on high-income groups

102
Growth Stage

rapid market acceptance
new competitors will enter
introduce new product features
market will expand
profit increases

103
Maturity Stage

slowdown in sales
competitors begin marking down prices,. to
find better versions of the product
drop in profit
only well-established competitors

104
Decline Stage

sales fall off and profits drop
some firms withdraw from the market

105
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106
Ways to extend PLC

To increase the frequency of use
to add new user
to find new uses
to change package size, label, or product quality

107
Pricing
108
Factors influencing pricing decisions ----
Internal Factors

1. Business and marketing objectives
pricing objectives derive directly from
company objectives

109

2. Marketing mix strategy
must coordinate with product, design,
distribution and promotion decisions

110

3. Costs
set the floor for the price

111
External factors

1. The market and demand
Pricing in different types of market
consumer perception of
price and value

112

2. Competitors prices and offers

113

3. Other external factors
economic conditions
reseller conditions
Government

114
Pricing Objectives

Profit maximizing objective
Market share objective
Competition objective
Social objective
Image objective

115
General Pricing Approaches

Cost-based approach
Buyer-based approach
Competition-based approach

116
Pricing Strategies for New Products

Market-skimming pricing
Penetration pricing

117
Price-adjustment strategies

Discount pricing and allowances
cash discounts
quantity discounts
functional discounts
seasonal discounts
trade-in allowances
promotional allowances

118

Discriminatory pricing
customer-segment pricing
product-form pricing
location pricing
time pricing

119

Psychological pricing
Promotional pricing
loss leaders
special event pricing
cash rebates

120
Promotion
121
Promotion tools

advertising
sales promotion
public relations
personal selling

122
Setting the promotion budget

Affordable method
ignores the effect of promotion on sales

123

Percentage-of-sales method
wrongly view sales as the cause of promotion
rather than as the result

124

Competitive-Parity
method

125

Objective-and-task method

126
Advertising
127
Five important decisions

1. Setting objectives
to inform,
persuade, or
remind

128

2. Setting the advertising budget
stage in the PLC
market share
competition
advertising frequency
product differentiation

129

3. Creating the advertising message
message generation
message evaluation
message execution

130

4. Selecting advertising media
reach, frequency, impact
media types
media vehicles
media timing

131

5. Advertising evaluation
communication effects
sales effects

132
Sales Promotion
133
Sales promotion

A wide variety of short-term incentive tools
coupons
premiums
contests
buying allowances
to stimulate consumers, the trade partners, and
the companys own salesforce

134
Purposes of sales promotion

to stimulate consumer trials, to reward loyal
customers, to increase repurchase rate, to cement
long-term relationship with retailers,
used together with advertising or personal selling

135
Steps of sales promotion

Setting sales-promotion objectives
selecting sales-promotion tools
pretesting and implementing
evaluating

136
Public Relations
137
Public relations

Building good relations with the companys
various publics obtaining favorable publicity
building up good corporate image
handling or heading off unfavourable rumors,
stories and events

138
Public relations tools

Create news
speeches
special events
written materials
audiovisual materials
corporate identity materials
contributing money and time to public-service
activities

139
Major public relations decisions

Setting public relations objectives
choosing public relations messages and vehicles
implementing the public relations plan
evaluating public relations results

140
Personal Selling Sales Management
141
Steps of sales management

Setting salesforce objectives
designing salesforce strategy
structure, size and compensation
recruiting and selecting
training
supervising
evaluating

142
Personal Selling Process

Prospecting
Preapproach
Approaching the prospect
Making the presentation
Handling Objections
Close the sale
Follow up

143
Factors affecting the promotion mix

Type of product/market
push vs. pull strategy
buyer readiness state
PLC stage

144
Placing Products
145

The role of distribution is getting a product to
its target market.
Channels of distribution the routes followed by
products as they change ownership in the movement
from production to consumption

146
Distribution channel functions

Information
promotion
contact
matching

Negotiation
physical distribution
financing
risk taking

147
Designing distribution channel

Selecting the proper type of distribution channel
selecting the types of middlemen
determining the intensity of distribution

148
Meaning of logistics

the movement of all materials
raw materials from the sources to the
processing point
finished goods from the plant to ultimate
customers

149

concerns with the management of physical flow

150
Major logistics activities

Transportation
inventory maintenance
order processing
warehousing
materials handling

Protective packaging
acquisition
product scheduling
information maintenance

151
Marketing services
152
Definition

Service is an activity or benefit that one party
can offer to another that is essentially
intangible and does not result in the ownership
of anything.
Its production may or may not be tied to a
physical product
Diamond
medical diagnosis

153
The Servuction system

5 elements influence the service
Organization and system (invisible)
Environment (visible)
Contact personnel / service provider
Customer A
Customer B

154
The Servuction System
155
Characteristics of service

Intangibility
inseparability
heterogeneity
perishability
fluctuating demand

156
Characteristics of Services differing from Goods
Goods Services Resulting Implications Marketing Strategies
tangible intangible Services cannot be inventoried, patented, readily displayed/ communicated Tangibilize the intangible The Peninsula
157
Characteristics of Services differing from Goods
Goods Services Resulting Implications Mkt Strategies
standardized heterogeneous Service delivery customer satisfaction depend on employee actions Service quality depends on many uncontrollable factors No sure knowledge that service delivered matches what was planned promoted HRM mgt recruit Train Process standardization empowerment Service recovery
158
Characteristics of Services differing from Goods
Goods Services Resulting Implications Mkt Strategies
Production separate from consumption Inseparability of production consumption (interaction) Customers participate in affect the transaction Customers affect each other Employees affect the service outcome Decentralize may be essential Mass production is difficult isolate technical core decrease contact level Increase customer participation
159
Characteristics of Services differing from Goods
Goods Services Resulting Implications Mkt Strategies
Non-perishable Perishable fluctuate demand Difficult to synchronize supply demand with service Services cannot be returned / resold Services cannot be inventoried Capacity mgt Queuing mgt
160
Marketing Mix for Services

Product
Price
Promotion
Place
People
Process
Physical evidence Singapore air

161
Product

Tangiblize the intangible
core and supplementary services
customization vs. standardization
the service mix

162
Price

Customer being inseparable in the process, outlay
by customers include
Time
Physical effort
Psychological burdens (mental effort, negative
feelings)
Negative sensory burdens (unpleasant sensations
affecting any of the 5 senses)

163
Price

Good understanding of the costs is needed as
decrease of above burdens justify higher pricing
Difficult to define a unit of service,
considering
Visible vs. invisible
Difference in speed
Direct contact vs. impersonal channel

164
Promotion

Different from advertising for goods
Intangible nature
vivid information that produce a clear
impression on the senses, e.g. symbols
Services are harder for customer to evaluate
Use tangible cues, e.g. high calibre personnel
(DHL)
Strong organizational image
Use personal information source, e.g. celebrity
endorsements ????
Engaging in post-purchase communication

165
Place

Identify core services
Reduce contact of low contact element e.g.
download application forms
Use of technology to create new channels
e.g. Octopus for ticketing, online shopping
Convenience
Number of outlets
Location
scheduling

166
Fluctuating Demand

Supply side
Cross training
Use part time staff
Rent or share facilities equipment
Schedule down time during period of low capacity
(take vacation)
Extra service hours
Use technology
Use price

Demand side
Price discrimination
Reservation
Overbook
Queuing (make the waiting more tolerable)
Shift demand
Change the salespersons assignment
Create promotional events

167
People

Importance of customer contact personnel
Internal marketing (customer focus philosophy,
bonus, awards, recognition as incentive)
Ritzcarlton

168
Internal Marketing

169
Process

Customer involvement in production
Educate customers in using technology or
self-service
Develop service oriented internal process
Logistic support
Empowerment of staff for service recovery

170
Physical Evidence

Intangible nature makes service difficult to
evaluate
Communicate through corporate image, word of
mouth, pricing physical evidence, warranty,
awards
ritzcarlton
Judge by process, post-purchase information
search needs re-assurance

171
Customer Relationship Marketing
172
Meaning of CRM

the process of creating, maintaining, and
enhancing strong, value-laden relationships with
customers and other stakeholders.

173
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174
Rationale behind CRM

to retain current customers vs. to attract new
customers
new Marketing view the science and art of
finding, retaining and growing profitable
customers

175

challenges
changing demographics
more sophisticated competitors
overcapacity
customer lifetime value

176
Key concepts in relationship building

Customer satisfaction
perceived performance gt expectations
Customer loyalty and retention
create emotional affinity, not just rational
preference
share of customer
cross-selling

177
Tools to build lasting customers

Frequency marketing programs
affinity program
co-marketing and co-branding
customisation and prompt response
create long term contract

178

Frequency marketing programs

179

affinity program

180

co-marketing

181

Co-marketing

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cen
182

Co-branding
Sony Ericsson Mobile Communications was
established in 2001 by telecommunications leader
Ericsson and consumer electronics powerhouse Sony
Corporation. The company is owned equally by
Ericsson and Sony.

183
Consumerism
184
Meaning of consumerism

a movement that put pressure on businesses to
consider consumer needs and interests
consumer rights
right to be informed
right to be heard
right to safety
right to choose

185
Why consumers need protection?