MARKETING NOTES

WHAT IS MARKETING? 1. Find and understand customers needs and wants in the market place

Conduct consumer research, analyze customer data E.g. P&G executives routinely spend time with consumers in their homes so as to look at the differences in how they think about brands and what is important to them 2. Satisfying customers needs and wants Through market offerings of product and services Creating brand experience e.g. HP - personal user experience, computer is personal again Westin Hotels Upon knowing about customers needs for a good bed, came out with heavenly bed 3. Ensure that product or service is superior to competitors 4. Sustain competitive advantages 5. Stay relevant to changing environment

CREATING AND CAPTURING CUSTOMER VALUE Customer Relationship Management Customer Perceived Value o Delivering Superior Quality o Value = Benefits (functional & emotional)/price (Benefits to outweigh cost/ price in order to deliver value) e.g. Paige Premium Denim Jeans woman willing to spend money on this expensive jeans as it is manufactured with an uncompromising commitment to feminine detail and quality
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 Customer Satisfaction o Delivering more than you promise o Higher levels of customer satisfaction >> greater customer loyalty >> repeat purchases >> customer evangelists (spread word about good experiences) >> better company performance e.g. Riltz Carlton Top of the hospitality industry in terms of customer satisfaction, they anticipate and meet customers need effectively Creating Customer Loyalty and Retention o Customer lifetime value (Customers may be spending money in your company for his entire life time. Thus, losing him/her is equivalent to losing a stream of revenue) Relating carefully with selected customer o Customer relationship groups (Pg 48) Offering better service to profitable customers E.g. Best Buy Set up Geek Squad which offers on-on-one in store or athome computer assistance to high-value buyers. Reward zone for loyal customers DESIGNING THE BUSINESS PORTFOLIO Analyzing the Current Business Portfolio o BCG Approach, Growth-Share Matrix (Pg 66) Developing Strategies for Growth and Downsizing o Product/Market Expansion Grid (Pg 67) Market Penetration (Existing Products, Existing Market) Spurring growth through marketing mix improvements (adjustments to its product design, advertising, pricing, and distribution efforts) Market Development (Existing Products, New Markets) New demographic markets/ New geographical markets Product Development (New Products, Existing Market) Offering modified or new products to current market
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Diversification (New Products, New Markets) Starting up or buying businesses outside of its current products and markets

MARKETING PLAN 1. Analyzing the Marketing Environment 2. Marketing strategy (Helps you to create value for targeted customers) Market Segmentation Market Targeting Positioning & Differentiation 3. Determine the objectives 4. Recommendations/ Action Programs 5. Developing 4Ps in accordance to recommendations and to match positioning

1. Analyzing the marketing environment Microenvironment (Pg 91) o Company, Suppliers, Marketing Intermediaries, Competitors, Public, Customers Macroenvironment (Pg 94) o Demographic Chinas regulation of having one child each gave rise to huge market opportunities for children educational product. These children grow up to be indulge in luxury products Changing age structure Baby boomers, Generation X , Generation Y Changing American family Geographic shifts in population Better educated, more white-collar, more professional population (Pg 101)

Rising number of educated people will increase demand for quality products, books, magazines, personal computers and Internet services Increasing diversity

o Economic Environment (Pg 103 - 104) Changing income Indias growing middle class and rapidly rising income >> automakers introducing cars to India Rich grown richer, middle class shrunk >> target affluent Changing consumer spending patterns o Natural Environment o Technological Environment o Political and Social Environment Cause-related marketing (Pg 110) 4C Diamond Sub-Model Change (Pg 31-32 RM) o Refer to macro-environment Customer (Pg 42-43 RM) o Profiles of the various types of customers Company (Pg 44-45) o Tangible assets, intangible assets, organizational capabilities Competitor (Pg 38-39 RM) o General, aggressiveness, capability Using the 4C-diamond model to identify resources to support market strategy: o Resources must contribute to the fulfillment of customers needs at a price the customer is willing to pay o Resources must be rare and that competitors cannot easily acquire or replicate this competitive advantage of yours o Guarantee that you capture profits created by unique and valuable resources

2. Marketing Strategy STV Triangle (Pg 49 Rethinking Marketing) Market Segmentation (Pg 216-225) o Crucial role in the company: Focus on resource allocation Focus better on serving customer and providing customer satisfaction >> dominating the segment Clearer insight into the competition and determine market position Key factor in beating competition as it allows you to view your market in an unique angle different from competitors Business to Consumers o Market segmentation variables Geographic, Demographic, Psychographic, Behavioral o Considerations for effective segmentation Measurable Accessible Substantial

o Note: Baby boomers/Mature consumers is becoming a very attractive market for convenient services; cosmetics and personal care; health foods; fitness products; items that combat effects of aging Business to Business o Demographics Industry profile; company size; company age; company ownership structure; company age; company ownership structure o Buying decision response characteristics
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 Decision duration o Purchase situation response characteristics Size of order; urgency of order E.g. SingTel segment its market by viewing in from different angles; business and consumers

Market Targeting (Pg 225-233) o Allows allocation of resources effectively o Considerations: Size of market segment Companys competitive advantage (Availability of skills, resources and expertise) Competitors Power of buyers Power of suppliers o Levels of market targeting Undifferentiated marketing (mass marketing) Differentiated marketing (segmented marketing) Design separate offers for each segment Higher sales, stronger position within each market segment E.g. P&G - came out with multiple detergent brands for each of its different segment. Managed t capture 4 times the market share of its competitor, Unilever Concentrated marketing (niche marketing) Helps achieve strong market position due to its greater knowledge of consumer needs Special reputation to the needs of carefully defined segments Enables it to market more efficiently targeting products, channels and communication or programs towards consumers that it can serve best and profitably Allows smaller companies to focus its resources Higher risk

E.g. Whole Foods Market - focusing on the affluent group of customers; growing faster and more profitably than its competitors
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Individual marketing Local marketing

o Considerations when choosing a targeting strategy (Pg 231) Company resources Product variability Products life-cycle stages Market variability Competitors marketing strategies

Positioning (Pg 233-241) o Place the product occupies in consumers minds relative to competing products o Describes the value that you bring to your customer o Positioning to serve the needs and preferences of well-defined target markets o Competitive advantage: Product differentiation; Service differentiation (Ritz Carltons top quality service); Image differentiation (Ferrari); Personnel Differentiation (SIAs graceful stewardess) o Value proposition: More for more; more for the same, more for less; the same for less; less for much less o Positioning-Differentiation-Brand Triangle (Pg 52 Rethinking Marketing) o Positioning statement: To (target segment and need) our (brand) is (concept) that (point of difference) E.g. Amazon.com Position itself as the most convenient book retailer with the biggest selection and lowest price

Differentiation (Pg 75, Rethinking Marketing Ciscos differentiation) o Content Value offered to customers (tangible) E.g. Secret Recipe produce and maintain wide variety of superior products; delicious cakes o Context The way you offer the products and services (intangible) Effort to help customers perceive your offering differently E.g. Secret Recipe outlets furnished in a tasteful modern manner with pleasant interior design which provides the ideal ambience for a relaxing meal o Infrastructure Technology, people and facilities E.g. Secret Recipe Made use of PDAs to take orders, which are immediately routed to kitchen, so as to give staff more time to interact with customers and provide better service

3. Marketing Mix Product- Offer (Pg 248-253) 3 levels of product and services o Core Customer Value What is the buyer really buying? Define core, problem-solving benefits or services that consumers seek Buying an experience and not just merely the product itself E.g. BlackBerry People are buying more than a cell phone or a personal organizer; Buying freedom and on-the-go connectivity to people and resources

o Actual Product Product and service features, design, quality level, brand name and packaging Attributes have to be combined carefully to deliver core customer value E.g. Blackberry Name, parts, styling, features, packaging and other attributes have all been combined to carefully deliver the core customer value of staying connected o Augmented Product Additional customer services and benefits Warranty, product support, after-sale service E.g. Blackberry- Gives buyers warranty on parts and workmanship, instructions guides and quick repair system when needed Product and Service Classification (Pg 250-251) o Consumer products o Shopping o Specialty product o Unsought o Industrial product o Organizations, Persons, Places and Ideas Product and Service Decisions (Pg 253-259) o Product and service attributes o Branding o Packaging o Labeling o Product support service

Price Offer (Pg 314-315) (Pg 336-337) Factors to consider in setting prices (Pg 314-315) Customer Perceptions of Value o Value-based pricing Value-added pricing Cost based pricing Overall marketing strategy, objectives and mix
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 Market and demand Competitors strategies and pricing New product pricing strategies (Pg 336-337) Market-skimming pricing Market-penetration pricing Product mix pricing strategies o Product line pricing o Optional-product pricing o Captive product pricing o By product-pricing o Product bundle pricing Price-adjustments strategies (Pg 339-348) Discount and allowance pricing Segmented pricing Psychological pricing Odd-even pricing ($99 is seen to be just $90) Promotional pricing Geographic pricing Dynamic pricing International pricing

Price Changes (Pg 348-351) Initiating price changes o Price cuts/increase o Buyers reaction to price changes Responding to price changes Place Access (Pg 363) How channel members add value (Pg 364) Information, Promotion, Contact, Matching, Negotiation, Physical distribution, Financing, Risk taking Direct marketing channels, indirect marketing channels (Pg 365), multichannel distribution (Pg 370)
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 Marketing logistics and supply chain management (Pg 380-387)

Promotion Access (Pg 427) Marketing Communication Mix (Pg 426-427) Advertising o Possible/ types of advertising objectives (Pg 455) o Advantages/disadvantages of various media types (Pg 46 Sales promotion(Pg 503) o Consumer promotions o Trade promotions o Business promotions Personal selling Public relations (Pg 427-475) Direct marketing Nature of each promotion mix (Pg 440) Need for integrated marketing communication in order to deliver a clear, consistent and compelling message about the organization and its products (Pg 429) Types of promotion to use during the various product life cycle stages (Pg 444) Online marketing (Pg 528-541)

BRANDING (PG 259-268) Forge deep connections with customer Must be distinct Brand equity o Forge deep connections with customers o Differential effect that knowing the brand name has on customer response to the product or its marketing Building strong brands (Pg 262) o Brand positioning Attributes, benefits, beliefs and values o Brand sponsorship/ private brand
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o Licensing o Co-branding Brand development o Line extension, brand extension, multi-brands, new brands SERVICES MARKETING (PG 268-375) Marketing strategies for service firms o The service profit chains (happy employees leading to profitable customers) o Managing service differentiation o Managing service quality o Managing service productivity

CONSUMER MARKETS & CONSUMER BUYER BEHAVIOR (PG 161-175) Characteristics affecting consumers buying behavior o Cultural Culture; Subculture; Social Class o Social Reference groups; Family; Roles and status o Personal Age and life cycle stage; Occupation; Economic situation; Lifestyle; Personality; Self concept o Psychological Motivation; Perception; Learning; Beliefs & attitudes Types of buying behavior (Pg 176-177) Buyer decision process (Pg 177-181) Buyer decision process for new products (Pg 181-183)

PERSONAL SELLING Personal Selling Process (Pg 496-499) o Prospecting, pre-approach, approach, presentation, handling objectives, closing, follow-up Marketing Oriented Selling Techniques (To business organizations) (Lecture 6)

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1. Scan the business landscape o 4C Analysis 2. Assort and prioritize o Segmentation, targeting, positioning 3. Identifying the buying roles in the prospects organizations and explore the needs of each buying roles o Value that you can bring to each decision maker 4. Evaluate acceptance of our value proposition compared to competitors value proposition 5. Develop appropriate selling approach in order to close the deal o Promotional judgment and emotional interest CREATING A COMPETITIVE ADVANTAGE (PG 552) Key to gaining competitive advantage: o Take each customer segment and examine how companys offer compares to that of its major competitors o Strategic sweet spot (Pg 555-556) o Going for a market that is untapped by competitors Competitive strategies (Pg 560-561) o Overall cost leadership o Differentiation o Focus o Operational excellence o Customer intimacy o Product leadership Competitive positions (Pg 561-568) o Market leader o Market challenger o Market follower (in order to be a market follower, you need to be of a comparable size to your comparable to the market leader) o Market nicher
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PRODUCT LIFE-CYCLE STRATEGIES (PG 296-303) Introduction, growth, maturity, decline Summary of strategies (Pg 303) Stages in the product life cycle can also affect the type of advertising to make use of

When faced with a problem solving question 1. Objective 2. Impact of the problem 3. Segmentation, Target Market, Positioning, Differentiation 4. Recommendation *Value that you would bring

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