Download marketing - York University

The bridge that
closes the gap
between
customers and
producers
What is Marketing?
• Formal Definition:
– “The process of planning and executing the conception
(product), pricing, promotion, and distribution of ideas,
goods, and services to create exchanges that satisfy
AMA
individual and organizational objectives.”
•
Real Definition:
-
“The delivery of customer satisfaction at a profit.”
“Develop and maintain profitable relationships”
Reviewing the Inputs
Business
Environmental
Internal Strengths and Weaknesses
-Corporate Structure, Assets
-Personnel
-Sustainable competitive advantages
-Market share, position, performance
External Opportunities and Threats
-Competitive
-Economic
-Socio-Cultural
-Legal Political
-Technical
Analytic Tools:
• Research
• Situational Analysis
• SWOT
Marketing Objectives & Strategy:
The goals and plans for how to achieve
Consumer
The Group(s) being targeted
-Segmentation
-Needs & Wants
-Benefits
-Awareness
-Behaviour
The Marketing Environment
In a Market Orientation - The Environment is the key source of information gathering – it’s
critical to making good decisions and creating successful marketing plans.
Economic
Conditions
Natural
environment
The
Internal
Environment
Marketing
Strategy
Political-legal
climate
Technology
Customers
Sociocultural
environment
Competition
Environmental Scanning: Process by which the marketing
manager gathers and sorts information about the marketing environment.
The Economic Environment
Factors in a region or country that affect the production,
distribution, and consumption of its wealth.
Recession
Prosperity
Depression
Recovery
The aggressiveness of a marketing strategy and tactics often depends on
current buying intentions influenced by economic conditions.
– More aggressive marketing may be required for periods of lessened buying
interest to counteract cyclical periods of low demand.
– A rising sales trend line depends on management‘s ability to foresee, correctly
define, and reach new market opportunities (both cognitive and intuitive skills).
– Key elements are monetary resources, inflation, employment, and productive
capacity.
Competitive Environment
The dynamic that occurs when a number of companies attempt
to win over the event of ‘exchange’ with the same customer.
(provide comparisons by customers)
Types of Competition:
Direct (Interproduct),
Indirect (product substitute)
Alternative Gratification
Technological Environment
The applications of knowledge based on scientific
discoveries, inventions, and innovations.
Key drivers of technology innovation are sourced from the software/hardware,
web-network and telecommunications industries:
The pros/cons of technology innovation:
•
•
Technology helps make innovation possible: new products, new categories, cost reductions
through production efficiency, customer relationship improvements, new distribution options.
Marketers need to keep alert of technological changes in their environment without being
seduced by it. Innovation should be driven by customer needs.
The Sociocultural Environment
The mosaic of societal and cultural* influences that
are relevant to the organization’s business decisions.
•
•
•
•
•
•
General readiness of society to accept a marketing idea (e.g. Internet)
Public trust and confidence in business as a whole.
Socially oriented objectives (CSR – corporate social responsibility)
Multicultural markets.
Gender
Constantly changing social values.
*Culture: The personality of a society. Culture is the accumulation
of shared meanings, rituals, norms, and traditions among the
members of an organized society.
Marketing Defined
• Marketing:
–
–
–
–
Social and managerial process
Individuals and groups obtain what they need
Creating and exchanging
Products and values with others
• Needs:
– Felt deprivation
• Wants:
– Form of needs shaped by culture
and personality
• Demands:
– Wants backed by buying power
Figure 1.1
Products, Services, and Experiences
• Marketing offer:
– Address needs with a value proposition
– Set of benefits promised to customers to satisfy needs
– Can include:
– Products
– Services
– Persons
– Places
– Organizations
– Information
– Ideas
Figure 1.1
Value and Satisfaction
• Value:
– Benefits gained versus costs of obtaining product
• Satisfaction:
– Degree of meeting consumer’s expectations
– Expectations formed from:
•
•
•
•
Previous experience
Opinions of others
Marketing information
Competitive information and
promises
– Satisfied customers buy again and
tell others
– Dissatisfied customers switch and
tell others
Figure 1.1
Exchange, Transactions, and Relationships
• Exchange:
– Obtaining a desired object
– By offering something in return
• Transaction:
– Two things of value
– Agreed-upon conditions
– Time/place of agreement
• Exchange relationships:
– Want to build strong economic
and social connections
– Consistently delivering superior
value
Figure 1.1
Marketing
•Interface between the enterprise & its markets
Voluntary exchange of values
Value-creating process
Bundle of Benefits
The Marketing Function
information from customers
develops & markets products & services to satisfy needs
feedback on satisfaction levels
Marketing is interactive
 finance & accounting & production for PRICE levels
HR for customer service policies
Customer Relationship Marketing
A Key Trend—Customer Relationship Marketing
•
The development of long-term, mutually beneficial and costeffective relationships with your customer.
•
Emphasizes a market pull strategy:
 Determine what your target customer (TC) wants.
 Profile your target customer.
 Adapt or create a product or service to satisfy this want or
need.
Emphasizes a one-to-one marketing strategy.
•
Marketing Management
• Market:
– Set of actual or potential buyers
• Marketing management:
– Choosing target markets
– Building profitable relationships with them
• Demarketing:
– Reduce, not
destroy demand
– Temporarily or
permanently
Figure 1.2
EXAMPLES of
MARKETS
NEED market
PRODUCT market
DEMOGRAPHIC market
GEOGRAPHIC market
MARKET EXCHANGE RESOURCES
POLITICAL CANDIDATE
offers promise of good government to “voter market”
UNIVERSITY
cultivates the “mass media market”
MUSEUM
cultivates the “donor market”
Strategies for Growth
• Product-market expansion grid:
 Portfolio planning tool for identifying company growth
opportunities
 Uses products (new/existing) and markets (new/existing)
 Four strategies for growth
• Growth is necessary
• Marketing’s job to:
 Identify,
 Evaluate, and
 Select growth
opportunities
Figure 2.3
Strategies for Growth: Tim Horton’s
Marketing penetration:
 Opening more locations in existing markets, advertising
 Continuous improvement of facilities and operations
Market development:
 New demographic age groups, or geographical locations (U.S.A)
Product development:
 Expanding the product line to
attract lunch crowd (and steeped
tea)
Diversification:
 Entering new markets with new
products
 Growth by acquisition or
development
Partnering:
 Gas bars
Figure 2.3
Steps in Market Segmentation,
Targeting, and Positioning
• Market segmentation: dividing market into distinct groups with
distinct needs, characteristics, or behaviours, who might require
separate products or marketing mixes
• Target marketing: choosing which group(s) to appeal to
• Market positioning: creating a clear, distinctive, and desirable
position in the target consumer’s mind, relative to competition
Figure 9.1
Bases for Market Segmentation
Descriptive
Demographic Segmentation
Gender
Age
Family life cycle
Race/Ethnic group
Education
Income
Occupation
Family size
Religion
Home ownership
Geographic Segmentation
Country
Region
Urban/Suburban/Rural
Population density
City size
Climate
3-8
Behavioural
Psychographics Segmentation
Lifestyles
Psychological variables:
Personality
Self-image
Potential
Markets
Benefit Segmentation
Expected benefits from product
use
Usage Rate
Heavy users
Brand loyalty
Requirements for Effective Segmentation
– Uniqueness
• Are there real differences
– Measurable:
• Size, purchasing power, and profiles can be measured
– Accessible:
• Are they open to being reached
• Segments can be effectively reached and served
– Substantial:
• Will the segment exist for a reasonable period
• Large enough or profitable enough to serve
– Actionable:
• Programs can be developed to attract and serve the
segments
Target Marketing Strategies
• Three factors used to evaluate segments:
– Segment size and growth
– Structural attractiveness
– Company objectives and resources
Figure 9.2
Target Marketing Strategies (continued)
• Target market:
– A set of buyers sharing common needs or characteristics that the
company decides to serve
• Undifferentiated (mass) marketing:
– Market coverage strategy that ignores market segment differences
and targets the whole market with one offer
• Differentiated (segmented) marketing:
– Market coverage strategy that targets several market segments and
designs separate offers for each
Figure 9.2
Target Marketing Strategies (continued)
• Concentrated (niche) marketing:
– Market coverage strategy in which a company pursues a large
share of one or a few sub markets
• Micro marketing:
– The practice of tailoring products and marketing programs to the
needs/wants of specific individuals and local customer groups
– Includes: local marketing and individual marketing
Figure 9.2
TARGET MARKET
(6 - O’s)
SELLER’S MIX
(The P’s)
UNCONTROLLABLE FACTORS
*Demographics
*Globalization
*Political
* War
*Economy
*Environmental
* Research
*Legal
* Government * Technology *Terrorism
TARGET MARKET
1. OCCASIONS
WHEN does the market buy ?
2. ORGANIZATION
WHO is involved in buying ?
3. OCCUPANTS
WHO is in the market ?
4. OBJECTS
WHAT does the market buy ?
5. OBJECTIVES
WHY does the market buy ?
6. OPERATIONS
HOW does the market buy ?
The “WHO” of the 6 O’s
1. WHO is in the Market ?
OCCUPANTS
for consumer markets = all individuals, groups, households who
buy or acquire goods & services
Variables = age, personal tastes, education, mobility patterns, income
4. WHO is involved in the Buying?
ORGANIZATION
initiator
influencer
decider
buyer
user
The “WHAT” of the 6 O’s
WHAT does the Market buy?
OBJECTS
(a.) Based on consumer shopping habits
Convenience goods
Shopping goods
Specialty goods
(b.) Based on rate of consumption & tangibility
Durable goods
Non-durable goods
Services
The “WHEN” of the 6 O’s
WHEN does the Market buy?
(a.) seasonal factors
(b.) time of year or week or day
(c.) economic conditions
(d.) rate of consumption
OCCASSIONS
The “WHY” of the 6 O’s
WHY does the Market buy?
OBJECTIVES
What needs are consumers seeking to satisfy?
physiological,
psychological,
spiritual,
social needs
The HOW of the 6 O’s
HOW does the Market buy?
OPERATIONS
Characteristics influencing consumer buying behaviour
•Buyer Characteristics
•Product Characteristics
•Seller Characteristics
•Situational Characteristics
The Power of Profiling
Three types of customers:
1. Primary - The primary or target customer is most likely
to buy your product or service and could be a heavy
user.
2. Secondary - The secondary customer has a possibility
of buying your product or service but needs convincing.
3. Invisible - The invisible customer is the one you don’t
anticipate but has a need for your product or service.
This customer appears after you open the doors.
Two Types of Customer Profiles
1. Business to Consumer (B2C) or
End-User Profile

If your TC is the consumer or end-user, your customer
profile will likely require demographics or psychographics.
2. Business-to-Business (B2B) Profile

Many small businesses offer their services or products,
often on a contract basis, to other businesses.

These supply chain companies need a customer profile
that is based on business or company-type information.
Demographics and Psychographics
DEMOGRAPHICS
 Demographics involves key
personal characteristics of a
group of people. These
characteristics include:






Age
Sex
Family Status
Age of Children
Education
Residence
PSYCHOGRAPHICS
 Psychographics is the process
of segmenting the population by
lifestyles and values. These may
include:
 Where they eat
 Where they shop
 Sporting activities they
engage in
 Entertainment activities
they engage in
 How socially and
physically active they are
 Whether they travel for
business or fun
Media Sources Can Help
• Demographic and psychographic
profiles are available from media
sources:
Magazines
TV and radio stations
Online
Media Sources Can Help
• Analyze media sources aimed at different
target markets.
• What does your target customer read, listen
to or watch?
• Action Step 25 will help you get started.
Conduct primary and “new eyes” research.
Interview magazine buyers.
Do some secondary research. Write to
advertising departments. Ask for media kits and
reader profiles.
Business to Business (B2B)
Business-to-business or supply chain firms can be characterized as:
 Businesses whose target customers are other companies.
 Businesses who do not deal directly with the end-user or consumer.
 Businesses whose major goal is to create partnerships, ventures,
alliances, or associations with their target customers.
A target customer profile would include:
Company Profile—e.g. size of business, type of business
End user Profile—e.g. end-user application, decision-maker
Industry Profile—e.g. trends, competing firms and barriers to entry.
CUSTOMERS - THE CENTRE OF
BUSINESS
New marketing campaign
based on feedback
Marketing campaign generates leads
Qualified leads become prospects
R&D product enhancement
based on feedback
Satisfied customers buy more
Sales turns prospects into orders
Manufacturing, distribution & accounting
process orders
Support resolves customer issues
Plotting Your Future
Checklist
 Profile your target market in terms of primary, secondary, and invisible
customers.
 What do the results of your primary research questionnaire tell you
about your target market?
 What information have you developed about your target customer
from your secondary research?
 What characteristics are unique or clearly definable about your target
customer?
 What is the best way to reach your target market?