Marketing Principles

General Knowledge:
Definition: An activity, set of institutions and processes for creating, communicating, delivering and
exchanging offerings that have value for customers, clients, partners and society at large.
Needs: States of felt deprivation.
Wants: The form taken by human needs as they are shaped by culture and individual personality.
Demands: Human wants that are backed by buying power.
Customer Value: The difference between the values the customer gains from owning and using a
product and the costs of obtaining the product.
Customer Satisfaction: The extent to which a product’s perceived performance matches a buyer’s
expectations.
Exchange: the underlying theory of marketing, and explains why we need to work in order to get the
things we want. “The act of obtaining a desired object from someone by offering something in
return”
Transaction: A trade between two parties that involves at least two things of value, agreed-upon
conditions, a time of agreement and place of agreement.
Relationship marketing: the process of creating, maintaining and enhancing strong, value-laden
relationships with customers and other stakeholders
FOUR P’s: PRODUCT – PRICE – PLACE – PROMOTION

Marketing Challenges in the 21st Century:

Marketing accountability
Implementation of stronger market orientation
The new marketing landscape
Growth of non-profit marketing
Rapid Globalisation
Information Technology and electronic marketing
The changing world economy
The call for ethical behaviour and social responsibility
Marketing concepts:

1. Production: available, affordable products. Mgmt stresses increased production and

efficiency.
2. Product: Emphasis on high quality, performance and features. Mgmt seeks to continuously
improve the product.
3. Selling: consumers won’t purchase or want a product unless org maximises
marketing/promotion efforts
4. Marketing: goals depend on determining needs and wants in order to increase customer
satisfaction
5. Societal Marketing: goals depend on determining needs/wants in order to increase customer
satisfaction, with a society/community outlook: emphasis on environmental sustainability.
 Marketing Process Model:
1. Understand needs and wants
- Research the market/customers/potential customers
- Mgmt of data & mktg info
2. Design marketing strategy
- Select target market & segmentation
- Decide value proposition – differentiation/positioning
3. Integrated marketing program
- Product/service design & branding
- Pricing
- Distribution
- Promotion
- Essentially 4 or 7P’s. Other P’s: Process, Physical evidence, Personnel
4. Build profitable relationships
- CRM
- Partner relationship – Mktg relationships
5. Capture Value
- Create profits, loyalty
- Capture customer lifetime value
- Increase market share
 Strategic Planning – Strategic fit between goals & capabilities & changing opportunities
1. Planning
- Strategic plans
- Marketing plans
2. Implementation
- Carry out plans
3. Control
- Measure results
- Evaluate
- Take corrective action  Process begins again (continuously).
4. Analysis takes place at each step

 Marketing Plans
1. Executive Summary
2. Current mktg situation: distributions, microenvironment, product, market, competition
3. SWOT & Issue analysis
4. Objectives: financial & mktg goals: sales goals, market share, profit goals
5. Mktg strategy: Mktg approach – Broadly
6. Action Programs: specific programs for specific objectives
7. Projections: profit/loss statement
8. Controls: monitoring

 Macro environment:
1. Demographic
2. Economic
3. Natural
4. Technological
5. Political
6. Cultural
 Marketing research process
1. Defining problem/research objectives
2. Developing research plan for collecting info
- Determine specific needs
i. Demographics
ii. Consumer attitudes
iii. Forecasts
- Gather secondary data – info already exists, initially gathered for another purpose
i. Internal sources
ii. Gov’t publications
iii. Periodicals/books
iv. Commercial data
- Plan primary data collections
i. Approaches
a) Observational
b) Surveys
c) Experiments
ii. Contact methods
a) Mail
b) Telephone
c) Personal
iii. Instruments
a) Questionnaire
b) Mechanical devices – people metres, scanners
- Presenting the plan
i. Including costs & time frames
3. Implementing research plan
- Collecting date
- Processing info
- Analysis info gathered
4. Interpretation and reporting of findings
 Consumer Behaviour
1. Marketing Stimuli
- 4/7 P’s
2. Other Stimuli
- External Forces
3. Buyers black box
- Buyer characteristics
- Buyer decision process
4. Response
- Product/service choice
- Brand choice
- Dealer
- Timing

 Buyer Characteristics
1. Internal
- Psychological
i. Motivations
ii. Perceptions
iii. Learning
iv. Beliefs
- Personal
i. Age
ii. Life cycle
iii. Occupation
iv. Education
v. Economic status
vi. Lifestyle
2. External – buyer environment
- Cultural
i. Culture
ii. Social class
- Social
i. Household
ii. Reference groups
 iii. Roles/status
- Marketing efforts
i. Objectives
ii. Strategies
iii. Mktg mix
- Environmental influences
i. Economic climate
ii. Technology
iii. Political

 Buyer Decision Behaviour

1. Complex Buying
- High Involvement
- Significant differences between brands
2. Dissonance Reducing
- High involvement,
- Little differences between brands
3. Habitual
- Low involvement
- Few differences
4. Variety Seeking
- Low involvement
- Significant differences
 Buyer Decision Making Process (Existing product)
1. Need recognition
2. Information Search
- Personal reference points
- Commercial sources
3. Evaluation of alternatives
4. Purchase decision
5. Post purchase behaviour
- Satisfaction levels
- Repurchases

 Buyer Decision Making Process (New product)

1. Awareness
2. Interest
3. Evaluation
4. Trial
5. Adoption
 Three Stages of Marketing
1. Mass marketing: mass produced, mass distributed, mass promoted – 1 product to the whole
market
2. Product variety mktg: 2+ products to different group with different marketing strategies
3. Target mktg: identification of segments, 1 chosen to target

 3 steps of target marketing:

1. Market segmentation: distinct groups of buyers with different needs & behaviours
- Indentify bases for segmenting
- Develop profiles of segments
2. Market targeting: selecting most attractive segment to target
- Develop measures of segment attractiveness
- Select target segments
3. Market position: setting competitive positioning (customer perception of value) & mktg mix
- Develop positioning strategy for each segment
- Develop mktg mix for each target segment

 Segmentation:
1. Geographical
- Region, City size, Density, Climate
2. Demographic:
- Age, Sex, Family size, Lifecycle, Income, Occupation, Education, Religion, Nationality
3. Psychographic:
- Socio economic, Values, Attitudes, Lifestyle, Personality
4. Behavioural:
- Purchase occasion, Benefits sought, User status, Usage rate, Loyalty

 Differentiation/Positioning: the way a product is defined/perceived by consumers

Positioning strategies:
- Product attributes
- Benefits
- Usage occasions
 - Users
- Against Competitors
- Away from competitors
- Product classes
1. Identify customer value differences i.e. Competitive Advantage
2. Select the right competitive advantage
3. Select overall positioning strategy
4. Positioning Statement

 Perceptual Map:

 Organisation differentiation by:

1. Product Differentiation
- Features, performance, consistency, durability, reliability, reparability
2. Services Differentiation
- Delivery, installation, repair services, customer training, consultation
3. Personnel Differentiation
- Highly trained, courteous, professionalism, knowledgeable, accuracy
4. Image differentiation
- Image constructs a strong, singular, distinctive message of org/product
- Takes time: golden arches, apple, red kangaroo - from persistence in the market
- Endorsements: high profile people able to convey the distinctive message
PRODUCT:

Definition: Anything that can be offered to a market for attention, acquisition, use or consumption
that might satisfy a need or want. It includes physical objects, services, persons, places,
organisations and ideas.

Three levels of Products:

Core Product – problem solving services or core benefit that consumers are really buying
Actual Product – quality level, features, styling, brand name & packaging
Augmented Product – additional consumer services & benefits built around the core & actual

Product Classifications:
Consumer Products: bought by final consumers for personal consumption.
Convenience: bought frequently, immediately, with minimum comparison and effort
Shopping: process of selection, comparison & purchase
Specialty: unique characteristics, brand ID, significant group of buyers willing to make a
special purchase. E.g. luxury cars
Unsought: consumers either don’t know about or don’t think about purchasing, e.g. life
insurance.
B2B Products: bought for further processing or for use in conducting a business.
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 Concepts relating to marketing strategies e.g. Product Life Cycle

 Bling H2o Case Study