Marketing Management

Module 1

Unit 1: Introduction to Marketing

• What is Marketing?• Pg. 11– “Marketing is the process of planning and

executing the conception, pricing, marketing communication and distribution of ideas, products, and services to create exchanges that satisfy individual and organisational goals.”

• Key factor: Satisfying customer needs

Marketing

• Anticipating and satisfying consumer needs by means of a mutually beneficial exchange process.

• Do this profitably and more effectively than competitors by means of efficient managerial processes.

Services Marketing (7 Ps)

• Service product—the offering• Physical evidence—tangible support• Service process—delivery activities• People—the delivery and support mechanism• Place—Distribution, availability, accessibility• Pricing—what the customer pays• Promotion—the communication link

Five Degrees of Tangibility

• Pure tangible goods• Tangible goods with accompanying services• Hybrid offers (meal at a restaurant example)• Major services with accompanying minor

goods and services (air travel example)• Pure service (medical and legal examples)

The Marketing Process (pg. 14)

Five Conditions for Exchange• There must be at least two parties.• Each party must have something the other party

values.• Each party must be able to communicate with

the other party and deliver the goods or services sought by the other trading party.

• Each party must be free to accept or reject the other’s offer.

• Each party must want to deal with the other party.

Marketing Orientations (pp. 15-16)

• Product orientation – Internal capability of the organisation is the main

focus• What is easy to produce, given our equipment?• What services are most convenient for us to offer?

• Sales orientation– People will buy more products and services if

aggressive sales techniques are used – High sales result in high profits.

Marketing Orientations (pp. 15-16)

• Marketing orientation– Tailor products to meet the demands of customers– Building relationships with your customer is

essential to long-term success

• Consumer orientation– Maximising the lifetime value of a customer– Achieving the profitability objective must also be

taken into account while providing for consumer needs.

Market-Oriented Business Definitions

Marketing Orientations (pp. 15-16)

• Profit orientation– Profit-seeking organisations attempt to achieve a

specific rate of return on total assets in the long term, rather than seeking to obtain unduly high returns in the short term

– A short-term approach can endanger survival• Societal marketing orientation (Not in your text)

– Consider consumers’ wants, the company’s requirements, consumers’ long-term interests, and society’s long-run interests

Management Tasks (pg. 17) • Identify opportunities and threats in the marketing environment • Identify those opportunities which can be used in terms of internal

strengths and weaknesses • Compile marketing data • Choose a specific target market • Decide on the products to be produced in order to satisfy consumer

needs • Decide on the selling price of the product in order to achieve

sufficient sales and market share to obtain the objective of profitability

• Decide on specific distribution channels • Decide on marketing communication methods whereby consumers

are informed, reminded and persuaded • Decide on selection, training, remuneration and motivation of

marketing personnel • Organise and lead the activities of the marketing department

Marketing Mix (pp. 18-19)

Unit 2: The Marketing Environment

• Market environment– Forces outside the business that cannot be controlled by

marketing management– Customers, competitors, intermediaries, suppliers, etc.

• Macro environment– External forces that an individual business cannot

influence – Technology, economy, political and social changes, etc.

• Micro environment– Controllable, internal variables– Mission, marketing, HR, operations, finances, purchasing etc.

SWOT Analysis

Group Activity

• Divide into groups of 2• Answer questions for Activities 1.3 (pg. 24)

and 1.4 (pg. 25)• Pick a spokesperson– (The other person will speak next time.)

• You have 15 minutes for this activity…

Unit 3: Marketing Information System

• An MIS:– Includes people, equipment, and procedures– To gather, sort, analyze, evaluate & distribute – Needed, timely, and accurate information

• MIS begins and ends with information users:– Marketing managers– Internal & external partners

• Decision Support System (DSS)– Helps change raw data, such as product sales for the

previous day, into more useful information.

Marketing Research (pg. 28)

• Procedures used to develop and analyse information which helps marketing managers to make decisions

• MR steps:– Formulate the research problem and objectives– Create the research design– Collect, process and analyse data– Communicate information to the marketing

decision-maker

Unit 4: Consumer and Business Behaviour

• Factors influencing consumer buying behaviour– Culture• “Integrated patterns of human behavior that includes

thought, speech, action, and artifacts and depends on a person’s capacity for learning and transmitting knowledge to succeeding generations”

– Reference groups• Groups that influence your buying behaviours

Reference Groups

• Formal and informal – Work or hobbies/fun

• Primary reference groups– Regular daily contact

• Secondary reference groups– Indirect contact, but influence your buying behaviour

• Membership and non-membership – Church or club

• Aspiration– Desire to belong

• Dissociative– Groups you avoid or reject

More Buying Behaviour Factors

• Social class– Group of people who enjoy more or less the same

prestige and status in society

• Family– Probably the main external determinant of

individual consumer behaviour– Acts as a socialising agent– Also is an economic unit with members having

complex roles in the purchasing decision

Individual Factors

• Perception– Exposure– Attention– Interpretation– Recall and memory

• Learning– Stimulus– Response– Reinforcement

Individual Factors

• Motivation– Psychological motives– Emotional– Cognitive– Environmental

Maslow’s Hierarchy of Needs

Individual Factors

• Psychographics– Personality, motive and lifestyle

• Attitude– Cognitive– Affective– Conative (behavioural)

• Personality– Inner psychological characteristics

Consumer Decision-Making Process

Organisational Buying Decisions• Straight rebuy – Low involvement

• Modified rebuy– Contract modification– More decision participants– Opportunity for competitors

• New task– High involvement– Greatest marketing opportunities and challenges

• Systems buying– Packaged solution to a problem (rather than separate

decisions)

Unit 5: Market Segmentation, Targeting and Positioning

• Market segmentation– Dividing a market into smaller segments with

distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes• Forces marketers to focus more on customer needs• Can lead to the identification of new marketing

opportunities• Guides development of separate market offerings and

strategies for the various target groups• Helps guide the proper allocation of marketing

resources

Disadvantage of Segmentation

• Development and marketing of separate models and market offerings is expensive

• Limited market coverage (due to targeting only specific segments)

• May lead to excessive product differentiation and market share cannibalisation

Prerequisites for Market Segmentation

• Measurable

– With respect to size, purchasing power, and profiles

• Large enough (substantial)

– Must be profitable

• Accessible

– Segment can be reached and served

• Actionable

– Effective programmes can be designed

• Differentiable

– Segments respond differently to different marketing mixes

Variables Used for Segmentation• Geography• Demographics• Psychographics

– Attitudes, Interests, and Opinions (AIOs)– Values and Lifestyles

• Behaviour– Purchase decision– Benefits sought– User status (non-users, ex-users, potential users)– Usage rate– Loyalty status– Buyer readiness stage– Attitude toward the product

Positioning

• The image consumers have of a particular brand or trademark– Positioning happens in the minds of the

consumer!• Determine existing consumer perceptions with market

research• Positioning map of competing products

– Attributes– Benefits– Use/application– Etc.

Group Activity

• Divide into the same groups of 2• Create a positioning map• The person who didn’t speak last time will be the

group’s spokesperson– Explain the market you chose to position– Explain why you chose the axis labels– Explain what the points on the map tell you about

that market

• You have 15 minutes for this activity…