Download Marketing Summary

Harrison slattery
Marketing Revision
Marketing is the total system of interacting activities such as planning, promotion, price and
distribution all involved in in presenting products and services to customers
What is the strategic role of marketing?
The strategic role of marketing Is to translate the financial goal of profit maximisation into a reality.
Marketing strategies (promotion, price, planning, distribution) are activities used to attain greater
sales.
Types of markets
Industrial: Individuals/groups engaged in secondary (e.g. Steel factories) and tertiary production
(e.g. Retailers like IGA)
Intermediate: Wholesalers/retailers who purchase finished goods and sell them with a mark-up
(Coles, IGA)
Resource: groups/individuals engaged in primary production, buying and selling (coal mining for
example BHP)
Consumer (niche, mass, micro)
INFLUENCES ON MARKETING
 Factors influencing customer choice
What are some factors (psychological, sociocultural, economic, government) that influence
customer choice ?
Customer choice is the buying behaviour of customers. Customer choice can be influenced by a
number of factors, such as psychological factors, sociocultural factors, economic factors and
government factors.
Psychological factors: Influences within a person to buy a certain product/service
-Attitude: Persons feelings about the product.
-Personality: The characteristics that make up a person. May buy product to reflect their
personality.
-Perceptions: How a product is viewed
-Motives: A reason to buy a product, based on its taste, smell, look.
-Learning: A change in the individuals behaviour based on the product.
Sociocultural influences: Forces exerted by people that affect customer behaviour
-Social Class: A persons status in society, based on education, income, occupation. Influences the
type, quantity and quality of product someone buys.
-Culture: Determines what people eat, wear, buy.
-Family Roles:
-Peer Group: A group of people a person closely identifies with. Buying behaviour may change to
match the rest of the groups beliefs/attitudes.
Harrison slattery
Economic influences: A businesses capacity to compete and a customers willingness to spend.
-Boom: A period of low unemployment and rising incomes. Business/consumers are optimistic, so
they increase product/spend more.
-Recession: A period of high unemployment and incomes fall dramatically. Spending confidence
reach low levels
Government factors: Governments can introduce policies to alter or influence business activities
and spending habits of customers.
 Consumer Laws
Protect the rights of customers purchasing goods/services
Sets out the business obligations when selling goods/services in Australia
EXAMPLE: Competition & Consumers Act 2010
 This acts protects consumers against undesirable business practices and prohibits various
unfair business practices
 Administered/enforced by the ACCC (Australian Competition and Consumer Commission)
Deceptive and misleading advertising
-Products must not be advertised as having a specific trait or quality when it does not -Can include
country of manufacture, packaging, special offers.
-These can convey an unrealistic image of the product or service.
Price Discrimination
-Setting different prices based on geopgraphic location
-EXAMPLE: Sony ps4 in USA is $400, in AUS it is $500
Implied Conditions – consumer guarantees
-Unspoken/unwritten terms of a contract that are assumed to exist.
--EXAMPLE: A cheaper products is implied to be worse than a more expensive product.
Warranties
 Ethical
Refers to conduct that goes beyond the legal requirements.
Truth, accuracy and good taste in a dvertising:
May be unethical if a business advertises a product as being “low fat” or “special” without stating
why
can include vague statements, concealed facts and exaggerated claims.
EXAMPLE: Coles in 2014, fined $3 million for advertising their bread as “freshly baked in-store”
Exaggerated claims is also known as puffery. This is exaggerated praise for promotional purposes
Engaging in fair competition
Harrison slattery
Businesses compete against each other to attract the greatest number of customers
Weasel words = vague statements
EXAMPLE:
Hungry jacks app
 Allowed users to score a promotion at any hungry jacks restaurant.
 Aimed at young children
 Dietitians say it promotes child hood obesity
MARKETING PROCESS
Involves six steps
1. Situational awareness
2. Market Research
3. Establishing market objectives
4. Identifying target markets
5. Developing market strategies
6. Implementation, monitoring, controlling.
 Situational Awareness
Determines whether a business has an understanding on its current business position
-Involves the use of a SWOT analysis & a products life cycle
SWOT ANAYLSIS
An analysis of a business internal strengths and weaknesses and external opportunities and
threats.
Internal = What a business controls
External = What a business does not control
PRODUCT LIFE CYCLE
Introduction = Product/service is introduced, consumer market is established, promotion directed
at specific audiences
Growth = Market share and use of promotion increases and targets more markets, quality is
maintained
Maturity = Sales plateau, products try to differentiate from others, price may decline
Decline = sales decrease, promotion discontinued, price lowered to sell remaining stock.
EXAMPLE: VOLKSWAGEN BEETLE IN SNAPSHOT BOOK
 Market Research
Collecting, recording and analysing info concerning a specific marketing problem.
Can minimise the risk of failure for a product/services introduction
Steps
1. Determining info needs: Establish what kind of information is required.
2. Data collection (Primary + secondary) : Can be done through survey (asking members of a
group), observation (recording behaviour of customers) or experiment methods (Altering
Harrison slattery
factors under tightly controlled conditions to evaluate cause and effect)
3. Data analysis and interpretation: Draw conclusions from the data, then interpret the data.
 Establishing Market Objectives
Realistic and measurable goals to be achieved through the marketing plan.
Most common goals include
 Increasing market share
 Profit maximisation
 Expanding product range
 Increasing customer service
1. Increasing market share: Market share refers to the business share of the total industry
sales for a product. SNAPSHOT IN BOOK
2. Expanding product range: The total range of products a business offers. Expanding this
means to introduce more products over a time period. To expand businesses must
understand customer needs and wants. SNAPSHOT IN BOOK
3. Increasing customer service: This means responding to the needs and wants of customers.
High levels of customers satisfaction increase customer loyalty and the possibility of repeat
purchases . EXAMPLE: hotels regularly follow up your stay with a questionnaire regarding
your stay
 Identifying Target Markets
Determining who a business is aiming to sell their product/service too. A business picks a target
market to direct its marketing strategies at.
Based on
 demographic
 psycho-graphic
 geographic
 product related.
TERMS
Potential Market: Set of consumers who have interest in the product.
Penetrated market: Consumers who have already bought the product.
Primary Target Market: Major market segment that most marketing resources are directed. They
will purchase most of the production
Secondary Target Market: Usually a smaller and less important segment. They will purchase the
product in small quantities
There are 3 approaches to identifying a businesses target market
1. Mass Marketing
Mass Marketing seeks a large range of customers. Usually only selling one product with little
variation (EXAMPLE: Coca-cola)
2. Market Segment Approach
This is when the total market is subdivided into segments. Each segment is targeted individually.
3. Niche Market
A narrowly selected target market (EXAMPLE: local bakery)
Harrison slattery
 Developing Marketing Strategies
These are actions undertaken to achieve the business marketing objectives through the marketing
mix.
The marketing mix is the 4 P's,
 Price
 Production
 Promotional
 Place (also called Distribution)
The extended Marketing mix (the 7 P's) includes People, Processes and Physical Evidence
People:




The quality of interaction between the business and customers
Employees determine the quality of service customers with receive.
Customers judge or develop perceptions based on the service they receive from
employees.
A good quality interaction with customers can give a business a competitive advantage
Processes:



Refers to the flow of activities that a business will follow in its delivery of a service.
Well design and organised processes assist employees in delivering an efficient service.
Poorly implemented and designed processes will lose customers for the business.
EXAMPLE: A restaurant that keeps customers waiting has inefficient processes and will lose
customers.
Physical Evidence:


Refers to the environment in which the service is delivered. The type of image your
business portrays through its physical appearance such as premises, appearance of staff,
vehicles, signage and website.
EXAMPLE: A workplace with poorly dressed staff and is messy is going to lose customers
compared to one that has well groomed staff and is clean.
 Implementation, Monitoring and Controlling
How to implement, monitor and control the marketing plan.
Implementation: The process of putting the marketing strategies into operation.
For effective implementation, a business must..
 Clearly communicate all plans with employees
 Ensure staff are motivated to implement marketing plans
 Outline how the change will be monitored
 Resources for the marketing plan are allocated
 Cost benefit analysis is correct
Monitoring: Checking/observing the actual progress of the marketing plan. Looks at real time info
at each stage of the marketing process
Harrison slattery
Controlling: Involves the comparison of actual performance against planned performance & taking
corrective action to ensure that the marketing objectives are being achieved.
A KPI (Key performance indicator) is to be used to establish a forecast level of performance which
actual performance can be measured against.
The KPI's that can be used include:
 Sales analysis
 Market share analysis
 Market profitability analysis
Sales analysis:
The comparison of actual sales to forecasted sales
Determines how effective a marketing strategy is
Easy to collect and process, does not reveal the profit level however
Market Share analysis
Comparing a businesses marketing strategy to its competitors (EXAMPLE: IGA to Coles)
A business can evaluate whether an increase/decrease in sales is a result of the marketing strategy
or an uncontrollable external factor (EXAMPLE: the economy)
Market Profitability analysis
Using this a business breaks down the total marketing costs into specific marketing activities, such
as advertising, transport, admin, ordering process and so on.
By comparing the cost of each activity, a business can determine the effectiveness of each activity.
Once the results for the KPI's have been calculated, a business is in a position to determine which
objectives are being met and which are not. Based on this info the marketing plan can be modified
or revised.
Can be changed by...
 Changes in the marketing mix (4 P's)
 New product development
 Product deletion
Marketing Strategies
These are plans to meet marketing objectives. A good understanding of the marketing mix and the
7 p’s, market segmentation and product/service differentiation is need to develop appropriate
marketing strategies
Main goal of a marketing manager is to develop a maintain a marketing mix that precisely matches
the needs of the consumers in the target market.
 Market segmentation, product/service differentiation and
positioning.
Harrison slattery
Marketing Segmentation
Involves dividing the total market into segments, a business then selects one of the segments to be
its target market.
Ultimate aim to to increase sales and profits by understanding and responding to different target
customers.
A market can be divided according to 4 main variables:
 Demographic: Features of a population
 Geographic: locations, rural or urban
 Psychographic: Personality, traits
 Behavioural: Customers relationship with the product
Product/service Differentiation and Positioning
Differentiation refers to the process of developing and promoting differences between the
business products/services.
Can include difference in price, quality, labelling, packaging, amount of features for example
Positioning refers to the technique were marketers try to create an “Image” for a product. Effects
how potential buyers perceive the product.
EXAMPLE: Rolex is seen as an expensive product for high class people
 Products – Good and/or Services (brand, packaging)
Product – goods/services
Products are good/services exchanged to the purpose of satisfying a need/want.
Can be tangible (real, physical,) or intangible (not physical, like a DVD)
Total Product concept is the combination of tangible/intangible concepts you get when buying a
product
EXAMPLE: A Restaurant dinner could include food (tangible) and live music (intangible).
Product Branding
This is term, name, symbol or design a product/service is identified with, that distinguishes them
from its competitors
Helps consumers identify certain and specific products
Reduces perceived risk of the product, you know?
Gains psychological reward that comes from purchasing a brand that has status or prestige
EXAMPLES: Mooloo milk, Mambo, apple, Sony, steam, Big M, Rockstar
For businesses, they are able to gain repeat business, encourages customers loyalty, new products
are able to be introduce easily under that same brand name and promotion for one product
automatically promotes their other products.
A brand symbol or logo is a graphic representation that identifies a business or product. In most
cases, the brand name ad logo work together unanimously. EXAMPLE: The nike “swipe”
Some brands are privately owned by retailers or wholesales, usually for exclusivity, and the
business can gain more profits from their sales. EXAMPLE: Myer used Blaq and Miss Shop
Harrison slattery
Some brands are generic brands, meaning they are 'no name” brands. EXAMPLE: Black & gold
Packaging
Involves the development of a container and the graphic design for the product
Well designed packaging can give a positive impression of the product and encourage first time
customers
Packaging:
 Preserves the product
 Protects the product from damage
 Attracts customer attraction
 Assists the display of the the product
 makes transportation and storage easier
 Price including pricing methods – cost, market, competition-based
Price refers to the amount of money a customer is prepared to offer in exchange for a businesses
product
Price too high and customers wont buy the product, but a price too low and customers may think
the quality is inferior
Of all the elements in the marketing mix, price is the most flexible. It can adjusted quickly in
response to competitors actions and changes in the marketplace
Pricing Methods
A businesses pricing methods are influenced by internal and external factors
There are 3 main pricing methods
 Cost-based
 Market-Based
 Competition-Based
A cost-based pricing method is when a business determines the total cost of producing one unit of
the product, then adding any amount to cover additional costs (interest, insurance) and provide a
profit margin. Formula used to calculate the price is = Cost + (cost x mark-up percentage) = price
A market-based pricing method is when a business sets a products price based on its level of
demand. When demand is greater than supply, there is a shortage in the market, and price is
forced up .
A competition-based pricing method is when a business determines the price of a product based
on what their competition has priced their (the same) product. It is where the price covers cost (of
raw materials and cost of operating the business) and is comparable to the competitors price.
Pricing Strategies
A pricing strategy can depend on a businesses marketing objectives, the life cycle of the product,
its market and the level of economic activity to name a few.
Pricing strategies will have to be modified depending on changes within the external business
marketing
The different types of marketing strategies are:
 Price Skimming: Where a business charges the highest possible price for a product during
Harrison slattery



the introduction stages, to recover costs quickly.
Price penetration: Charging the lowest price possible to gain a large market share
Loss Leader: Deliberately selling a product at a loss to attract customers
Price Points: Selling prices at set, predetermined prices, also called price lining.
Price and Quality interaction
This refers to the images customers have of products/brands
Cheaper products may be seen as inferior or being a poorer quality
The pricing strategy, prestige or premium pricing, is where a high price is charged to give the
product an aura of quality/status.
 Promotion
Promotion describe the methods used by a business to inform, persuade and remind a target
market about its product.
Promotion attempts to:
 attract new customers
 Increase brand loyalty, by reinforcing image of the product
 Encourage existing customers to purchase more
 Provide info to customers
The promotion mix includes
 Advertising
 Personal selling and relationship marketing
 Sales promotion
 Publicity and public relations
Promotion mix - Advertising
A paid, non person message communicated through a mass medium (tv, radio)
Successful advertising can increase sales and profits
Businesses are able to reach large audiences or focus on smaller markets
Advertising media is the term for the form of electronic and print communication used to reach an
audience.
EXAMPLE: Mass marketing – tv, radio, billboards, e-marketing, telemarketing, direct marketing
catalogues.
The type of advertising depends on the product, the size of the target market, the marketing
budget, cost of adverting and the product position in the product life cycle.
Promotion mix – Personal selling and Relationship Marketing
Involves the activities of a sales rep directed to a customer in an attempt to make a sale
Involves the human aspect of promotion for expensive, complex or highly individual products
Can be an expensive promotional method, but the advantages are that:
 it can be modified to suit the individual customer,
 after sales customers service can be provided
 Individualised assistance can create a long term relationship
EXAMPLE: Travel agent, can modify travel arrangements to suit the individual customers and can
Harrison slattery
create a long term relationship with the business.
Relationship marketing is the development of long term cost effective & strong relationships with
individual customers.
EXAMPLE: Coles fly buys loyalty reward program.
Promotion mix – Sales Promotion
The use of materials or activities as direct inducements to customers
It aims to:
 Entice new customers
 Encourage trial purchase of a new production
 Increase sales to existing customers
EXAMPLE: Coupons, samples (taste testing).
Promotion mix – Publicity and Public Relations
“Any publicity is good publicity”
Publicity refers to any free new story about the business or its products. The aims of publicity are
to:
 enhance the image of the product/business,
 highlight the favourable features of the business and
 reduce any negative image that has been created.
Public Relations (PR) refers to activities aimed at creating favourable relations between a business
and its customers.
The Communication Process
This is how marketing managers communicate with target markets.
A variety of channels of communication are used.
 Opinion leaders
 word of mouth
An opinion leader is a person who influences other, their opinions are respected. A very powerful
promotion tool
EXAMPLE: The use of celebrities to promote products
Word of mouth communication occurs when people influence each other during conversation
EXAMPLE: “Nah man, maccas is filled with bogans, lets hit KFC”
 Place/Distribution
The activities that make products available to customers, how and where a product can be bought
by a consumer
Distribution channels (marketing channels) are routes taken to get the product from the business
to the customer. Involve a number of intermediaries.
4 most common channels include:
 Producer to consumer: Simplest, no intermediaries, EXAMPLE: Fresh fruit
 Producer to retailer to consumer: Retailer is intermediary, EXAMPLE: Perishables
 Producer to wholesaler to retailer to consumer: Common, wholesales purchases and sells
Harrison slattery
large amount of goods to retailers. EXAMPLE: Metcash and IGA
 Producer to agent to wholesaler to retailer to consumer: Agent distributes product and gets
paid a commission, EXAMPLE: Primary production, freq used goods.
Non-store retailer: Retailing conducted away from the usual store front, like internet stores or mail
order marketing.
Channel Choice
There are 3 main types of channels. The channel choice for how a product is distributed is
important the success of the marketing plan
Intensive distribution is where a product saturates (dominates) the market. EXAMPLE: Coca-Cola
saturates the soft drink market
Selective Distribution is where only a select few outlets (stores) are used to distribute the product.
Considered more suitable for high end goods EXAMPLE: Jewellery
Exclusive Distribution is when only one outlet is used in a large geographic area. EXAMPLE: Harley
Davidson
Physical Distribution
All the act ivit ies concerned with the efficient movement of the products from the producer to
consumer
Involves the use of:
 Transport
 Warehousing
 Inventory
Transport
The most cost effect ive method of moving a business’s products, perishability and bulk are
major considerat ions
Warehousing
The receiving, storing and dispatching of goods. Products in storage need to be accessed
quickly, involves equipment like forklifts and conveyer belts.
Inventory Control
Ensures a business has products available for sale without holding too much stock. Most
businesses operate JIT (Just in t ime) inventory control, when stock is delivered when needed.
Major distribut ion centres (like METCASH) are used because of their convenient access to
transport and can process and deliver orders quickly.
 People, processes and physical evidence
These 3 P’s are part of the extended market ing mix. They apply to intangible products and
services.
People
Refers to the quality of interact ion between the customer and those within the business who will
Harrison slattery
deliver the service (employees)
Consumers base their percept ions/make judgements about a business based on how employees
treat them
Processes
Refers to the flow of act ivit ies a business follows to deliver a product/service
Without a tangible product, processes must be highly efficient to achieve customer sat isfact ion
(More efficient = higher customer sat isfact ion)
Physical Evidence
The environment in which the service is delivered (storefront, website)
Includes materials needed to carry out the service such as signage, logos, and website
A business should provide high-quality physical evidence to create an image of value and
excellence
 E-Marketing
Using the internet to promote products or services and build relationships with customers
Refers to the application of marketing principles and techniques via electronic media (the internet)
E-marketing Includes:
 Banner Advertisements
 Newsletters
 Ads
 Email Marketing
can be seen on web pages, podcasts, SMS, email, ads, banners, blogs
E-marketing can enhance a businesses image, help a business identify different markets, results
can be seen instantly.,
SMA
Social media advertising
Using social media websites like face book, twitter, reddit, to deliver info on products/services to
potential customers.
Advantages include:
 Fast
 Inexpensive to set up
 Easy to monitor
 Effective method to gain exposure
Disadvantages include:
 No control on what people say
 Difficult to measure number of people exposed
Harrison slattery
 Global Marketing
When a business decides to expand overseas, the marketing plan must be changed to suit the
differing target markets of each country that have different needs/wants. The extended marketing
mix needs to be adapted accordingly.
Some transnational companies see the planet as one large market, and offer little customisation
for their products (standardised approach, E.G Coca-Cola), while other companies take in
difference in each countries culture, race, religion etc.
Global Branding
Refers to the worldwide use of a name, term, symbol to identify the sellers item
Used for a number of reasons:
 Cost effective in terms of marketing
 Provides a uniform worldwide image
 Successful brand name can be linked to new product Introduced into the market
Some businesses can modify the product to suit local conditions
EXAMPLE: Pepsi, coke
Standardisation
Global marketing strategy that makes products the same all over the world.
 Assembly and production is cheaper,
 Good is able to be moved easily,
 Achieves economies of scale (cost advantages a business achieves due to size, output or
scale of operation) '
EXAMPLE: Cosmetics, food, electrical goods '
Customisation
A customised global marketing strategy is when the existing market mix (the 7 P's) is modified or a
new one is developed when expanding overseas
Assumes that the needs of customers are different between countries or regions EXAMPLE: Pepsi
makes a local soft drink in the middle east called Shani
Some business combine customised and standardised EXAMPLE: McDonalds: Name, logo and
production methods are standardised, but menu contains local variations
Global Pricing
How a business determines what price its products/services will be set at across different countries
Global pricing can be achieved through
 Customised pricing
 Marketing customised pricing
 Standard world wide pricing

Customised Pricing: Customers in different countries or regions are charged different prices for the
same product
Market customised Pricing: Prices set depending on the local mark conditions. The most flexible
market method as market conditions can change.
Harrison slattery
Standard world wide price: The same price, regardless of the region or market condition
Competitive Positioning
How a business will differentiate its products from competitors and achieve a market share.
To differentiate, a business must strive to develop market leadership, positive customer
relationships and operational excellence
End of business marketing
cheers for reading. Trademarked 2015 Harrison Slattery