what is marketing?
TRANSCRIPT
B: Marketing & mCommunicationsB: Marketing & mCommunicationsEE2162EE2162
[email protected]@brunel.ac.uk
Lecture 1:Lecture 1:
What is What is
Marketing?Marketing?
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Some basic questionsSome basic questions
What is a market?What is a market? How does a farmer get cows & dairy products to market?How does a farmer get cows & dairy products to market? Who are the farmer's customers? Who are the farmer's customers? What are the features of the farmer’s market?What are the features of the farmer’s market? Who are the participants?Who are the participants? Do potential customers know & understand the farmer's Do potential customers know & understand the farmer's
products & value them?products & value them? There are many farmers in the market. What must a milk There are many farmers in the market. What must a milk
producer/farmer do to compete well ?producer/farmer do to compete well ? How can the farm's milk products be differentiated?How can the farm's milk products be differentiated? What is marketing?What is marketing?
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Marketing is ….Marketing is …. A business philosophy: access to the customer & A business philosophy: access to the customer &
consumer satisfaction is the main profit sourceconsumer satisfaction is the main profit source functions & processes/activities to deliver “customer“ functions & processes/activities to deliver “customer“
value includingvalue including marketing research to understand customer needs & behaviourmarketing research to understand customer needs & behaviour segmenting into targeted sub-marketssegmenting into targeted sub-markets developing products & positioning these in the marketplace developing products & positioning these in the marketplace making pricing decisionsmaking pricing decisions deciding on a deciding on a promotional mixpromotional mix to communicate, sell & distribute to communicate, sell & distribute commissioning marketing artifacts & activitiescommissioning marketing artifacts & activities marketing planning & management marketing planning & management
subject to new ways of delivering value e.g. WWW, subject to new ways of delivering value e.g. WWW, customer relationship mgt (CRM), viral marketing etc customer relationship mgt (CRM), viral marketing etc
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More .... defining "Marketing"More .... defining "Marketing"
NOT a clever form of sellingNOT a clever form of selling aims to make selling superfluous … to aims to make selling superfluous … to
know & understand the customer know & understand the customer so wellso well that the product/service fits & sells itself. that the product/service fits & sells itself.
InvolvesInvolves commitment to a "market orientation" commitment to a "market orientation" a knowledge domain of specific processes & a knowledge domain of specific processes &
practicespractices data & informationdata & information creative communication creative communication valuesvalues a network of participantsa network of participants
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What is the link between marketing and ....What is the link between marketing and .... ??
product product researchresearch
design & design & manufacturemanufacture
pricingpricing packagingpackaging brandingbranding promotionpromotion
advertisingadvertising distributiondistribution sellingselling merchandisingmerchandising after-sales after-sales
serviceservice complaints complaints
handling etchandling etc
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Typical Marketing ActivitiesTypical Marketing Activities
research research customer needs & wantscustomer needs & wants customer buying & customer buying &
shopping behaviourshopping behaviour
mailshot existing mailshot existing customers with new customers with new product detailsproduct details
develop new packagingdevelop new packaging design free offersdesign free offers
set up WWW-sites & set up WWW-sites & analyse customer hitsanalyse customer hits
explore opportunities to explore opportunities to reach new marketsreach new markets
understanding “the understanding “the competition”competition”
push company push company innovationinnovation
commission TV commission TV advertisingadvertising
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organisation's competence in marketing & doing it to organisation's competence in marketing & doing it to good effectgood effect
interaction with other core processes, for managing interaction with other core processes, for managing successfully the firm’s successfully the firm’s market relationshipsmarket relationships
(co-responsibility) for processes that create customer (co-responsibility) for processes that create customer value (strategy; order generation, fulfillment & service value (strategy; order generation, fulfillment & service process; new product development)process; new product development)
• acquisition, deployment & enhancement of specialist acquisition, deployment & enhancement of specialist marketing knowledgemarketing knowledge
The marketing manager responsible for….. The marketing manager responsible for…..
Murray and O’Driscoll.
a knowledge &
a knowledge &
practice domain
practice domain
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What is marketing theory like?What is marketing theory like?
a collection ofa collection of recorded experience & ideas about the human recorded experience & ideas about the human
activity of marketingactivity of marketing descriptions & prescriptions marketers use to descriptions & prescriptions marketers use to
analyse, decide & deliveranalyse, decide & deliver non-comprehensive or coherent theory non-comprehensive or coherent theory
Patchy bits of explanation from economics, psychology, Patchy bits of explanation from economics, psychology, sociology, research methodologies etcsociology, research methodologies etc
socially constructed notions from marketers & socially constructed notions from marketers & mediamedia
functional & neutral ideas & practices ?functional & neutral ideas & practices ? supports capitalist & consumerist positions.supports capitalist & consumerist positions. a danger that it is exploitative & unhealthy for a danger that it is exploitative & unhealthy for
society – why ?society – why ?
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Perspectives on marketingPerspectives on marketing
ALSO Socially responsible (ethical) marketing i.e. ALSO Socially responsible (ethical) marketing i.e. we care about ethical matters – children, the elderly, society, the we care about ethical matters – children, the elderly, society, the Planet.Planet.
Source: Jobber & Fahy, 2009, Principles of Marketing, McGraw HillSource: Jobber & Fahy, 2009, Principles of Marketing, McGraw Hill
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Do these products sell themselves?Do these products sell themselves?
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Week 2Week 2 Sign in PlzSign in Plz Welcome to newcomers Welcome to newcomers
– pity you weren’t here – pity you weren’t here last week last week
Finish lecture 1 “What is marketing”Finish lecture 1 “What is marketing” Maybe start lecture 2 eCommerceMaybe start lecture 2 eCommerce Have you formed exam groups for your Have you formed exam groups for your
2010 examination.2010 examination.
Recap on AssessmentRecap on Assessment
3-hour exam3-hour exam A: Human Communication (Dr Cockett Term 2)A: Human Communication (Dr Cockett Term 2) B: Marketing Communication (Term 1)B: Marketing Communication (Term 1)
based onbased on TWO questions with cases you will research & study beforehandTWO questions with cases you will research & study beforehand No notes !!!No notes !!! For the marketing questions form a study group to research and For the marketing questions form a study group to research and
familiarise yourself with TWO “cases” fromfamiliarise yourself with TWO “cases” from A selected product group within A selected product group within Proctor & GambleProctor & Gamble e.g. e.g. GilletteGillette earth-moving equipment industry marketing e.g. earth-moving equipment industry marketing e.g. JCBJCB, , CaterpillarCaterpillar, ,
KomatsuKomatsu etc etc Hotel sector including: Hotel sector including: HiltonHilton, , AccorAccor, , TravelodgeTravelodge, , TownhouseTownhouse HMVHMV
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• needs, wants, demands – we all needs, wants, demands – we all have them !!!have them !!!
• productsproducts, v, value, satisfactionalue, satisfaction • exchangeexchange, , transactions & transactions &
relationshipsrelationships• What “the market” itself … is.What “the market” itself … is.
In marketing, ….understand the In marketing, ….understand the following termsfollowing terms
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NeedsNeeds states of “felt deprivation”states of “felt deprivation” are you deprived? Really? are you deprived? Really?
physical needs: everyday basic: health, food, physical needs: everyday basic: health, food, clothing, stressclothing, stress
order & safety needs – certainty, comfort, order & safety needs – certainty, comfort, routines, “in control”, cope with eventsroutines, “in control”, cope with events
social needs: association with others, belonging, social needs: association with others, belonging, affectionaffection
status & esteem needs: status, respect, roles, status & esteem needs: status, respect, roles, comparisons with otherscomparisons with others
self-determination & expression, world-viewself-determination & expression, world-view
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WantsWants
represented inrepresented in products, servicesproducts, services life styles/behaviours which may satisfy a needlife styles/behaviours which may satisfy a need
shaped by culture & personality e.g. shaped by culture & personality e.g. own house vs. rent house own house vs. rent house close family ties vs. distantclose family ties vs. distant bare flesh vs modestybare flesh vs modesty takers vs. giverstakers vs. givers spenders vs. saversspenders vs. savers
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Demands 1Demands 1
Are needs limited (e.g. food, shelter, Are needs limited (e.g. food, shelter, transportation)? What are the “limiters”?transportation)? What are the “limiters”?
Are wants unlimited e.g. unlimited food, Are wants unlimited e.g. unlimited food, more clothes, more music? more clothes, more music?
With “buying power”, do “wants” always With “buying power”, do “wants” always become for products & services? Is this become for products & services? Is this completely true?completely true?
Usually, we seek the best value we can Usually, we seek the best value we can afford? Really? Is it always about “afford”?afford? Really? Is it always about “afford”?
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Demands 2Demands 2
Want/need a car to satisfy need for transport … so a Lambourghini …. a Ford Fiesta?
What are the decision variables?
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Consumer SocietyConsumer Societya society strongly influenced by consumerism. A a society strongly influenced by consumerism. A critical view. Over-consumption & excessive critical view. Over-consumption & excessive production of short-lived or disposable items.production of short-lived or disposable items.
"There is enough on earth for everybody’s need, but not for everyone’s "There is enough on earth for everybody’s need, but not for everyone’s greed." (Ghandi)greed." (Ghandi)
"In a consumer society there are inevitably two kinds of slaves: the "In a consumer society there are inevitably two kinds of slaves: the prisoners of addiction & the prisoners of envy." (Ivan Illich)prisoners of addiction & the prisoners of envy." (Ivan Illich)
Consumerism: Consumerism:
equates personal equates personal happinesshappiness with with consumptionconsumption & material possessions & material possessions
economic policies emphasisE consumptioneconomic policies emphasisE consumption
consumer rights & protection subject to consumer rights & protection subject to caveat emptorcaveat emptor ("let the buyer ("let the buyer beware") beware")
"IKEA … popular everywhere … made to serve a mass market.“"IKEA … popular everywhere … made to serve a mass market.“
The narcissism of The narcissism of consumer soc consumer soc has left women unhappier than ever has left women unhappier than ever
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Demands 3Demands 3
we may decide on a PC to satisfy need for computing equipment … so which .. an Apple Mac Pro … or a Dell?
What are the decision variables?
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We satisfy our needs by products, services & We satisfy our needs by products, services & associationsassociations
physical objects: e.g. house, TV sets, cars – things to physical objects: e.g. house, TV sets, cars – things to own. Also services – activities/benefits offered for saleown. Also services – activities/benefits offered for sale
intangible & not owned intangible & not owned e.g. on-line banking services, divorce solicitor, hotel room, gang e.g. on-line banking services, divorce solicitor, hotel room, gang
membership, CIM membership, scaffolding hire etcmembership, CIM membership, scaffolding hire etc also includes entities such asalso includes entities such as
people (associations)people (associations), , placesplaces, , organisationsorganisations & & ideas (associations0 ideas (associations0 e.g. a TV programme, a political party, our country, a country to e.g. a TV programme, a political party, our country, a country to visit, visit,
All involve providers, deliverers, consumers, signs & All involve providers, deliverers, consumers, signs & signifiers + can be marketed and used in marketingsignifiers + can be marketed and used in marketing
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Conspicuous ConsumptionConspicuous Consumption
Thorstein Veblen
lavish spending on goods/services acquired mainly lavish spending on goods/services acquired mainly for displaying income or wealth, life & death for displaying income or wealth, life & death
In a conspicuous consumer’s mind, a means of In a conspicuous consumer’s mind, a means of attaining or maintaining status. “Keeping up with attaining or maintaining status. “Keeping up with the Joneses“. The rise of the SVU.the Joneses“. The rise of the SVU.
behavioural characteristics of behavioural characteristics of nouveau richenouveau riche (Veblen)(Veblen)
Usually discussed in the context of Usually discussed in the context of addiction or narcissismj induced by consumerismaddiction or narcissismj induced by consumerism desire for immediate gratificationdesire for immediate gratification hedonic expectations: “Me, me, me, me”hedonic expectations: “Me, me, me, me”
Invidious consumption:Invidious consumption: intended to cause envy intended to cause envy
http://www.nytimes.com/1998/11/30/nyregion/the-big-city-rich-and-poor-consumed-by-consuming.html
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Value, satisfaction, qualityValue, satisfaction, quality
guiding marketing concept = appealing to & guiding marketing concept = appealing to & giving giving customer valuecustomer value
We choose products, services, associations We choose products, services, associations based on a perception of need & value-for-based on a perception of need & value-for-money (VfM) …… important to usmoney (VfM) …… important to us
Satisfied customers make repeat purchases Satisfied customers make repeat purchases & tell others about their satisfaction& tell others about their satisfaction
The ticket price is the same but, we may choose The ticket price is the same but, we may choose Air France over British Airways. AF offers more Air France over British Airways. AF offers more frequent flyer benefits etc.frequent flyer benefits etc.
Evaluate the Ryanair pricing strategyEvaluate the Ryanair pricing strategy
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Exchange, transactions & relationshipsExchange, transactions & relationships
Marketing transactions occur when we decide to satisfy Marketing transactions occur when we decide to satisfy needs & wants thru needs & wants thru exchangeexchange. We acquire & offer . We acquire & offer something in return. We exchanging values something in return. We exchanging values
monetary e.g. £350 for a new TVmonetary e.g. £350 for a new TV barter: a car for a motorbikebarter: a car for a motorbike Warm fuzzy, pleasurable feeling when donating £100o to CJWarm fuzzy, pleasurable feeling when donating £100o to CJ
Transaction marketing Transaction marketing = one-off deals. Maximise profit/= one-off deals. Maximise profit/return. NO soul !!!!return. NO soul !!!!
Relationship marketing Relationship marketing = on-going, warm, caring= on-going, warm, caring+ yield is spread over the “affair” + build/maintain + yield is spread over the “affair” + build/maintain networked relationshipsnetworked relationships
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A MarketA Market Where exchanges &
transactions take place actual or potential consumers
or organizations are out there - with resources to buy
types of markets: raw material markets money markets labour markets retail, wholesale
shops, stalls, malls, warehouses on-line markets legal, illegal ?
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Understanding marketsUnderstanding marketsRecognise that markets involve many players :Recognise that markets involve many players :
customers:customers: B2C, B2B, retail, wholesale, B2C, B2B, retail, wholesale, organisational. Bricks & mortar, on-line/virtualorganisational. Bricks & mortar, on-line/virtual
companies:companies: producers, rivals, agents, collaborators, producers, rivals, agents, collaborators, lubricators, in perfect & imperfect marketslubricators, in perfect & imperfect markets
competitors:competitors: local, national, local, new entrantslocal, national, local, new entrants channels:channels: distribution & communicationdistribution & communication regulatorsregulatorsConcernsConcerns9.9. buyer needs, wants, desires, behaviour – customers buyer needs, wants, desires, behaviour – customers
& organisations& organisations10.10. segmentation, targeting & positioningsegmentation, targeting & positioning
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Marketing is a lot of workMarketing is a lot of work
sellers must search for buyers, identify needs, design good products, represent & promote, store & deliver
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From Marketing Mix to Marketing PolicyFrom Marketing Mix to Marketing Policy
Our marketing mix covers our mix of positions, policies & programmes in marketing.
4Ps & 7Ps
People
Place
Price
Product/service
PromotionLegal
& ethical factors
Societal culturalfactors
Political factors
Our response to technology
change
economic & competitive
factors
BuyerConsumer
Marketsegmentation
Product differentiation - ourcompetitive edge
Brand
Positioning
Environ-ment&Ethics
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““Our marketing mix”Our marketing mix” A memorable & practical framework for A memorable & practical framework for analysinganalysing & &
managing the elements in a company’s marketing managing the elements in a company’s marketing strategy & its practices. strategy & its practices.
Key decision areas: Key decision areas: product, price, promotion & place ….. 4Psproduct, price, promotion & place ….. 4Ps
In service businesses like hair salons, the hairdresser is In service businesses like hair salons, the hairdresser is a key to the service itself. A restaurant’s ambiance is a key to the service itself. A restaurant’s ambiance is vital for enjoyment of “the experience”.vital for enjoyment of “the experience”.
Service marketers argue for ‘7-Ps’ … the original 4-Ps Service marketers argue for ‘7-Ps’ … the original 4-Ps PLUS the people, process & physical evidence aspects PLUS the people, process & physical evidence aspects of services. of services.
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Product (the product decision)Product (the product decision)
what products/services & benefits offer to what products/services & benefits offer to customer groupscustomer groups
includes: includes:
features & USPsfeatures & USPs new product/service improvements e.g. Vista offers new product/service improvements e.g. Vista offers
new features over XP. new features over XP. choices regarding brand names, guarantees, choices regarding brand names, guarantees,
packaging & associated services, durabilitypackaging & associated services, durability availability (see place)availability (see place)
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Company/Product Life CycleCompany/Product Life Cycle
£/volume
Profit
Loss
Sta
rt-u
p
Growth
Maturity
Develop or decline
Time
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PricePrice
what we receive - income - for the product or servicewhat we receive - income - for the product or service what it costs to product & deliverwhat it costs to product & deliver what we pay in totalwhat we pay in total
other elements other elements product design – premium price, value rangesproduct design – premium price, value ranges delivery chargesdelivery charges easy payment terms easy payment terms advertising, promotions, transport & distribution represent costsadvertising, promotions, transport & distribution represent costs
Marketers focus on pricing objectives, methodsMarketers focus on pricing objectives, methods + price factors influencing the sale & value+ price factors influencing the sale & value
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Promotion & the promotional mix: Promotion & the promotional mix:
Covers:Covers: advertising, personal selling, sales promotions, advertising, personal selling, sales promotions,
public relations, direct marketing alsopublic relations, direct marketing also www/Internet marketing www/Internet marketing target audience awareness & loyalty towards target audience awareness & loyalty towards
the product/ service & its benefits (economic & the product/ service & its benefits (economic & psychological)psychological)
ingredients in a promotional mix have strengths ingredients in a promotional mix have strengths & weaknesses incl. WWW promotions.& weaknesses incl. WWW promotions.
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Place – can they be seen?Place – can they be seen?
ensure that products/services are available in ensure that products/services are available in the right quantities – stock availabilitythe right quantities – stock availability at the right timeat the right time in the right placein the right place
distribution channels to be useddistribution channels to be used agents retailers or wholesalers thru which goods pass agents retailers or wholesalers thru which goods pass
on their way to customerson their way to customers access to “the market” incurs a costaccess to “the market” incurs a cost location of outlets: mass, local. nichelocation of outlets: mass, local. niche exclusivityexclusivity transport & deliverytransport & delivery
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We develop our M-Mix to … We develop our M-Mix to …
fit our offering to target audiencefit our offering to target audience add to competitiveness (performance differential over add to competitiveness (performance differential over
rivals) rivals) match our strategy to our resources match our strategy to our resources
viable TV advertising needs a threshold investment e.g. viable TV advertising needs a threshold investment e.g. £5m pa for impact of a national advertising campaign. £5m pa for impact of a national advertising campaign.
small promotional budget? …. use less costly media. small promotional budget? …. use less costly media. We want blended, effective marketing with a consistent We want blended, effective marketing with a consistent
theme e.g. use exclusive outlets for upmarket fashion & theme e.g. use exclusive outlets for upmarket fashion & cosmetics — cosmetics — Bond Street WestBond Street West, , Bond St EastBond St East
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Huxtable Farm – Bead & Breakfast – North Devon
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Huxtable FarmHuxtable Farm – Marketing Strategy– Marketing Strategy
Relax & unwind with a holiday or weekend break in our comfortable 16th Century medieval farmhouse, with oak panelling, beams, log fires, uneven floors & low doorways! In a secluded position in rolling countryside & woodland, this is an ideal hideaway for exploring North Devon, Exmoor National Park & our beautiful coastline.
En-suite bedrooms, tennis court, sauna, games room and farm walk with abundant wildlife & panoramic views.
Enjoy a memorable home-baked 4-course candlelit dinner of farm/local produce served with home-made wine, tread your own wine too!
A Devon cream tea awaits you!
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Marketing is Easy... and DifficultMarketing is Easy... and Difficult
no business experience + we are observers no business experience + we are observers
No precise answers. Huge knowledge-baseNo precise answers. Huge knowledge-base Multidisciplinary (econ, psych, sociol, business etc. Multidisciplinary (econ, psych, sociol, business etc.
many sub-activitiesmany sub-activities
many different jobs in marketing many different jobs in marketing
For firms the difficulty is the need to be For firms the difficulty is the need to be customer customer not not product or organisation centred product or organisation centred
Firms enter a market by creating products/services & Firms enter a market by creating products/services & succeed only by creating/retaining customers at a profit.succeed only by creating/retaining customers at a profit.
View the business from end result i.e. customer View the business from end result i.e. customer viewpoint & valueviewpoint & value
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InvestigateInvestigate
the marketing mix of the marketing mix of the Elizabeth Botham WWW-sitethe Elizabeth Botham WWW-site www.shambala-retreat.comwww.shambala-retreat.com www.celestion.co.ukwww.celestion.co.uk
changes in the package holiday marketchanges in the package holiday market the marketing of Uxbridge. what, why and the marketing of Uxbridge. what, why and
how?how?
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For next weekFor next week
eCommerceeCommerce Form exam groups – Form exam groups –
groups that will take groups that will take you thru to your you thru to your 2010 examination.2010 examination.