Welcome to the Marketing Section of today’s First Years lectures.
Structure of the class
1. Introduction to marketing 2. Marketing research 3. Customer behaviour 4. Market segmentation 5. The marketing mix 6. The marketing strategy 7. Public relations
The Evolution of Marketing as we know it
• • • • • • Operation/Product orientation Sales orientation Marketing oriented Consumer oriented Strategic approach Relationship marketing
What is Marketing?
Marketing consists of management tasks and decisions directed at successfully meeting opportunities and threats in a dynamic environment, by effectively developing and transferring a need-satisfying market offering to consumers in such a way that the objectives of the business, the consumer and society will be achieved.
The Marketing Process
(see Fig 13.1)
Simply: Marketing management creates an offering (product, price marketing communication, distribution) The target market sacrifices money The target market consumes the offering Marketing management gets feedback through research This all happens in a marketing environment Everybody satisfies their objectives (maximise profitability in the long term, total need satisfaction)
Marketing Mix- The Four P’s
Product
“Goods-and-service” combination that a company offers a target market
Price
Amount of money that consumers have to pay to obtain the product
Target Customers Intended Positioning
Activities that persuade target customers to buy the product
Company activities that make the product available
Promotion
Place
The Importance of Information
Marketing Environment
Customer Needs
Why Information Is Needed
Strategic Planning
Competition
Marketing Research
Why? Know the research process Market forecasting
Sales forecasting Profit forecasting
1. Define the problem to be investigated 2. Formulate hypotheses 3. Investigate hypotheses 4. Compile a questionnaire 5. Test the questionnaire 6. Select sample 7. Train fieldworkers and do fieldwork 8. Analyse data 9. Interpret the results 10. Compile the report 11. Management studies report 12. Management implements findings
Consumer Buying Behavior
Consumer Buying Behavior refers to the buying behavior patterns of decision making units (individuals & households) directly involved in the purchase and use of products, including the decisionmaking processes preceding and determining these behaviour patterns.
Study consumer behavior to answer:
“How do consumers respond to marketing efforts the company might use, why do they behave the way they do?”
Maslow’s Hierarchy of Needs
Self Actualization
(Self-development)
Esteem Needs (self-esteem, status)
Social Needs
(sense of belonging, love)
Safety Needs
(security, protection)
Physiological Needs
(hunger, thirst)
Consumer Decision Process
Awareness of need or problem Information Search Evaluation of Alternatives Purchase Decision Post-purchase Behavior
Market segmentation
What is a market? Different types of markets: • consumers • industrial Approaches to the • resellers market – see fig 13.3 • government Requirements for successful segmentation: • Identifiable and measurable • Substantial • Accessible • Responsive
Customer Markets
International Markets Consumer Markets
Company
Government Markets Reseller Markets Business Markets
Requirements for Effective Segmentation
Measurable Accessible
• Size, purchasing power, profiles of segments can be measured. • Segments must be effectively reached and served.
Substantial Differential
Actionable
• Segments must be large or profitable enough to serve.
• Segments must respond differently to different marketing mix elements & actions. • Must be able to attract and serve the segments.
Bases for segmentation
Demographic – Who they are Geographic – Where they are Psychographic – What they think they are Behavioural – How do they behave
All of the above determine the consumer profile – draw a picture
Targeting and positioning
Bases for Segmenting Consumer Markets
Geographic
Nations, states, regions or cities, density
Demographic
Age, gender, family size and life cycle, or income
Psychographic
Social class, lifestyle, or personality
Behavioral
Occasions, benefits, uses, or responses
Market Coverage Strategies
Company Marketing Mix
A. MARKET AGGREGATION
Market
Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3
B. MULTI-SEGMENT APPROACH
Segment 1 Segment 2 Segment 3
Company Marketing Mix
Segment 1 Segment 2
Segment 3
C. SINGLE SEGMENT APPROACH
Positioning for Competitive Advantage
Product’s Position - the place the product occupies in consumers’ minds relative to competing products; i.e. Castle used to position on “the great South African beer”.
Then: “the friendship brew” Then: SA’s finest
Now? Satisfies a South African Thirst
Marketers must:
Plan positions to give products the greatest advantage Develop marketing mixes to create planned positions
Steps in Segmentation, Targeting, and Positioning
6. Develop Marketing Mix for Each Target Segment
5. Develop Positioning for Each Target Segment
4. Select Target Segment(s)
Market Positioning Market Targeting
3. Develop Measures of Segment Attractiveness
2. Develop Profiles of Resulting Segments
1. Identify Bases for Segmenting the Market
Market Segmentation
Marketing Mix- The Four P’s
Product
“Goods-and-service” combination that a company offers a target market
Price
Amount of money that consumers have to pay to obtain the product
Target Customers Intended Positioning
Activities that persuade target customers to buy the product
Company activities that make the product available
New Product Development Process Develop new ideas Screen ideas Eliminate non viable ideas Develop product Develop strategy Test marketing Commercialisation
The marketing instruments (mix)
3. Distribution
Type
of channel Channel leadership Market coverage Physical distribution
Refer to box on page 326
Consumer Marketing Channels & Levels
Channel Level - A Layer of Intermediaries that Perform Some Work in Bringing the Product and it’s Ownership Closer to the Buyer.
Channel 1 M Channel 2 M Channel 3 M
Direct
C
Indirect
R
C
W
R
C
Channel 4
M W
W
R
C
Physical distribution
Costs
Minimize Costs of Attaining Logistics Objectives
Order Processing
Submitted Processed Shipped
Physical distribution
Transportation
Water, Truck, Rail, Pipeline & Air
Functions
Warehousing
Storage Distribution
Inventory
When to order How much to order Just-in-time
The marketing instruments (mix)
4. Marketing communication
to inform, persuade and remind advertising personal selling sales promotion publicity
The Marketing Communications Mix
Advertising
Any Paid Form of Nonpersonal Presentation by an Identified Sponsor.
Personal Selling
Personal Presentations by a Firm’s Sales Force.
Sales Promotion
Short-term Incentives to Encourage Sales. Building Good Relations with Various Publics by Obtaining Favorable Unpaid Publicity. Direct Communications With Individuals to Obtain an Immediate Response.
Public Relations
Direct Marketing
The Integrated Marketing Strategy
The marketing concept: Profitability Consumer orientation Social responsibility Organisational integration Phases in the product life cycle: Introductory Marketing warfare Growth Attack Maturity Defense Decline
Product Life Cycle
Sales and Profits Over the Product’s Life From Introduction to Decline
Sales and Profits ($) Sales
Profits
Time
Product Development Losses/ Investments ($) Introduction Growth Maturity Decline
Marketing Planning and Control
Planning
o Strategic planning o Functional planning
Control
o o o o Set objectives Measure performance Evaluate performance Take corrective action
Public Relations
A deliberate, planned and sustained process of communication between a business and its internal and external publics. Its purpose is obtaining, maintaining and/or improving good relations and understanding.
Developed from: Manipulation Information Mutual influence
What is Public Relations?
•Building good relations with the company’s various publics by obtaining favorable publicity, building up a good “corporate image” and handling or heading off unfavorable rumors, stories and events. •Major functions are:
– Press Relations
– Product Publicity – Public Affairs – Lobbying
– Investor Relations
–Development
Major Public Relations Tools
Web Site Public Service Activities
News
Corporate Identity Materials
Speeches
Audiovisual Materials
Special Events
Written Materials
Public Relations Management
1. Planning o Scanning the environment o Setting objectives 2. Organising oOrganisational structure oOutside consultants 3. Leading oEstablish corporate culture
4. Evaluation and control
Communication
• Communication can be verbal and non-verbal
• Communication process – see fig 16.6
Basically: Sender encodes message which is transmitted to receiver via a medium. The receiver decodes the message and interprets it in some way. This all happens despite noise in the environment. • Types of communication media: The spoken word The printed media Sight and sound Special events The Internet
Publicity
• Methods of obtaining publicity:
Unique special events Unique communication messages News releases Sponsorships
• Social responsibility and business ethics • Areas of social responsibility:
Consumers Suppliers Competitors Employees Owners and shareholders The community
The end!
We encourage you to study further in this exciting field!