marketing management 1 4
DESCRIPTION
John Kitto Marketing slidesTRANSCRIPT
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Definition of Marketing• “The management process responsible for identifying anticipating
and satisfying customers’ needs profitably.”– CIM
• “Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange and satisfy individual and organisational objectives.”– American Marketing Association
• Includes: “Facilitating a mutually beneficial exchange of value between sellers and customers - repeatedly.”– Jon Kitto
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Kotler on Marketing
• “The marketer’s job is to research new opportunities for the company and carefully apply segmentation, targeting and positioning (STP) to point a new business in the right direction.
• Then marketers are supposed to flesh out the 4 Ps – Product, Price, Place and Promotion – making sure that they are consistent with each other and with the STP strategy.
• Then marketers are supposed to implement the plan and monitor the results.”
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The organisation’s marketing environment
Theorganisation
The economy
Socialfactors
Culturalforces
Technology
Political structures
Legalstructures
Demography
Suppliers
Distributors & dealersThe
public
CompetitorsCustomers
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Planning Summary
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The planning processWhere are we now?• Marketing audit• Ratio analysis• Competitor analysis• Customer analysis
Where do we want to be?• Missions & objectives• Segmentation (STP)• Marketing strategies
How might we get there?• Marketing mix
Which way is best?• Choice criteria & screening• Modelling
How can we ensure arrival?• Problems to overcome• Management controls
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Environmental Analysis• Macro
– Socio-Cultural– Technological– Economic– Environmental– Political– Legal– Educational
• Micro– Suppliers– Publics– Intermediaries– Customers– Competitors
• Internal– Men, – Money, – Machines, – Materials, – Management,– Management Information, – Marketing
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Porter’s value chainFIRM INFRASTRUCTURE
HUMAN RESOURCE MANAGEMENT
TECHNOLOGY DEVELOPMENT
PROCUREMENT
INB
OU
ND
LOG
ISTIC
S
OPER
ATIO
NS
OU
TB
OU
ND
LOG
ISTIC
S
MA
RK
ETIN
G&
SA
LES
SER
VIC
E
MARG
INM
ARGIN
SU
PPO
RT
AC
TIV
ITIE
S
PRIMARY ACTIVITIES Source: Porter
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SWOT FrameM
A T
C H
I N
G
Internal
External
Strengths Weaknesses
ThreatsOpportunities
Convert
Convert
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The Marketing Information System (MkIS)
Marketingintelligence
Marketingresearch
Internalrecords
Informationanalysis
Marketingenvironment
• Target markets
• Marketing channels
• Competitors
• Publics
• Macro-environment forces
Marketingmanagers
• Analysis
• Planning
• Implementation
• Organisation
• Control
Developing information
Distributinginformation
Assessinginformation
needs
Marketing information system
Marketing decisions and communications
Source: Kotler et al
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Brain Functions• LEFT BRAIN FUNCTIONS– uses logic– detail oriented– facts rule– words and language– present and past– math and science– can comprehend– Knowing– Acknowledges– order/pattern perception– knows object name– reality based– forms strategies– Practical– safe
• RIGHT BRAIN FUNCTIONS– uses feeling– "big picture" oriented– imagination rules– symbols and images– present and future– philosophy & religion– can "get it" (i.e. meaning)– Believes– Appreciates– spatial perception– knows object function– fantasy based– presents possibilities– Impetuous– risk taking
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Psychographic - VALS
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www.statistics.gov.uk
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ACORN
• Wealthy Achievers• Urban Prosperity• Comfortably Off• Moderate Means• Hard Pressed
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Dugree’s Model of the Motivation Process
C og n it ive P rocesses L earn in g
G oa l o r N eed F u lfillm en t
B eh aviou r
D rive
Ten s ion
U n fu lfilled N eed s , W an ts & D es ires
Tension Reduction
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Hierarchy-of-effects models
Table 3.1 Hierarchy-of-effects models
Based on: Barry, T.E. and Howard, D.J. (1990), ‘A Review and Critique of the Hierarchy of Effects in Advertising’, International Journal of Advertising, 9, 121–35.
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Kotler’s Model
• Need Recognition– Hunger, Thirst, Low Social Esteem
• Information Search– Sources:
• Personal• Commercial• Public• Experiential
• Options when Presented with Information– Get People to Modify Brand Choice– Alter Beliefs about Brand– Alter Beliefs about Competition
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Kotler’s Model cont...
• Purchase Decision– Attitude of Others– Change in Financial Circumstances
• Redundancy/Lottery Win
• Post Purchase Evaluation– Satisfaction/Dissatisfaction with Purchase– Influences
• Repurchase• Word of Mouth
– Cognitive Dissonance
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Purchase Decision
High LowDecision Complex LimitedMaking Decision Decision
Making MakingHabit Brand Inertia
Loyalty
Involvement
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Factors influencing consumer behaviour
Cultural Culture Sub-culture Social class Social
Reference groups Family Roles and status
Personal Age and life cycle stage Occupation Economic circumstances Lifestyle and personality
Psychological Motivation Learning Perception Beliefs and attitudes
Thebuyer
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Information Processing
Personality Perception
Attitudes Learning
EnvironmentalInfluences
Internalinformationprocessing
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Freudian Theory
• Psychoanalytic• Unconscious Needs or Drives
– Especially Biological & Sexual– Id (Impulse), Super Ego (Morals & Ethics), Ego (Control)– Phases of Development in Childhood
• Oral, Anal, Phallic, Latent, Genital
– Consumers are Largely Unaware of Reasons for Buying Particular Products
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Maslow’s Hierarchy of Needs
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Family Life Cycle• Bachelor
– I Young Single Adult Living Apart from Parents,
• Newly Married– II Honeymooners, Young Married Couple
• Full Nest I (Youngest Child<6 Years Old), – III Parenthood
• Full Nest II (Youngest Child>6 Years Old), • Full Nest III (Older Children), • Empty Nest I (Head Working)
– IV Postparenthood,
• Empty Nest II (Head Retired)• Solitary Survivor I (Working)
– V Dissolution,
• Solitary Survivor II, (Not Working)
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Customers are segmented by Lifestage
TOTAL CUSTOMERS
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JICNAR/Registrar GeneralRegistrar Social Jicnar OccupationGeneral's Grade Social CharacteristicsSocial Class StatusI A Upper Middle ProfessionalII B Middle ManagerialIII C1 Lower Middle Supervisory/Clerical
C2 Skilled Working Skilled ManualIV D Working Semi Skilled ManualV Unskilled Manual
E Subsistence Pensioners, Students, Unemployed
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Reference Groups
• “Any person that serves as a point of comparison (or reference) for an individual in forming either general or specific values, attitudes or a specific guide for behaviour.”
• Possible to use in order to affect desired changes in consumer behaviour
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Decision Making Unit (DMU)
• User -end user, may initiate request and help specify
• Influencer -technical personnel or specialists, help specify, provide information
• Buyer -formal authority holders, help specify, select vendors, negotiate
• Decider -final approver (often also buyer)
• Gatekeeper -control information flow to others, can prevent sales people gaining access
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Factors influencing industrial buying behaviour
ENVIRONMENTAL Levels of demand Economic prospects Interest rates The pace of technological change Political and legal structures Competitive structures
ORGANISATIONAL Objectives Policies Structures Systems & degree of centralisation Processes and procedures Managerial attitudes to risk Financial l resource Previous experiences
BUYING CENTRERoles in DMUGroup processesInterpersonalinteractions
INDIVIDUALPersonal objectivesJob positionAttitude to riskPrevious experiencesTechnical knowledgeMotivation
BUYINGDECISION
SOURCE: Adapted from Webster and Wind, 1972
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• The two dimension segmentation provides understanding of the customer’s value. Together with other segments and data this gives a close indication of a customers’ loyalty.
The ‘loyalty’ of each customer is measured every week
High Spend
Medium Spend
Low Spend
TwiceWeekly
Daily WeeklyStopStart
Now &Then
Hardly Ever
Premium
Standard
Standard
Potential
Potential
Potential
Uncommitted
Uncommitted
Frequent Infrequent Rare
© Copyright,dunnhumby 2002© Copyright,dunnhumby 2003
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The Ladder Of Loyalty
Advocate
Supporter
ClientCustomerProspectSuspect
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TYPE by Postcode
48 to 60
36 to 47
24 to 35
12 to 23
0 to 11
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Segmentation, Targeting & Positioning
Jon Kitto
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Consumer segmentation
Profile variables: demographic, socio-economic, geographic
Behavioural variables – benefit, usage, purchase occasion
Psychographic – VALS, Monitor
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Organisational segmentation
Macro-segmentation size of organisation location industry sector end use
Micro-segmentation DMU structure decision process buy class type of purchasing
organisation innovation level purchasing strategy
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Psychographics
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Customers are segmented by Lifestage
TOTAL CUSTOMERS
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• The two dimension segmentation provides understanding of the customer’s value. Together with other segments and data this gives a close indication of a customers’ loyalty.
The ‘loyalty’ of each customer is measured every week
High Spend
Medium Spend
Low Spend
TwiceWeekly
Daily WeeklyStopStart
Now &Then
Hardly Ever
Premium
Standard
Standard
Potential
Potential
Potential
Uncommitted
Uncommitted
Frequent Infrequent Rare
© Copyright,dunnhumby 2002© Copyright,dunnhumby 2003
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Aff
luen
ce
Mainstream 22%Family type mealsPopular brandsKids products
Finer Foods 18%“Foodieswho are time poor, money rich and choose everyday luxury items”
Price Sensitive 16%Cost conscious customers who tend to buy cheapest on display
Traditional 17%“Traditional households with time to buy and prepare ingredients”
Upmarket24%
market53%
Cost conscious23%
Convenience 9%“People on the go who haven’t time or inclination for scratch cooking”
Healthy 18%“Organic shoppers, fruit and vegetablesweight watchers etc”
© Copyright,dunnhumby 2002
Customers are segmented according to what they buy
Age“You are what you buy”. Lifestyles segments are derived from item level sales and were first created in 1997
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Altogether this provides Tesco with an ability to provide for customer
needs• Different customer groups have different
requirements and expectations.• Understanding them is the first step, you then
have to listen to them, and run the business around them.
I have to stick to a budget
The microwave is a godsend for
me!
I love baking on a Sunday afternoon
I love exotic and adventurous
food
I care about the environment
© Copyright,dunnhumby 2002© Copyright,dunnhumby 2003
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Insight and data drive the message and offers
© Copyright,dunnhumby 2002
Offers for things you buy
Offers for things to try
Vouchers based on points earned
Flash boxes with targeted message
Points details
Flash message will also be targeted to customers