Core Concepts of Marketing 1

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Lecture 5

• Core Concepts of Marketing (1)

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Marketing

• Marketing is the process of planning
  implementing the conception, pricing, promotion,
  and distribution of ideas, goods, services to
  create exchanges that satisfy individual
  organizational objectives

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Marketing environment

• Microenvironment (internal)
• Macroenvironment (external)

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Microenvironment(Internal environment)

• Marketing managers work co-ordinate marketing
  activities with other department within the
  mission, objectives, strategies polices.

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Microenvironment(Internal environment)

• Suppliers who provided resources needed by the
  company to produce goods services
• Aware of supply shortages, labour strikes, can
  interfere the suppliers, cause lost of sales,
  create customer dissatisfaction

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Microenvironment(Internal environment)

• Marketing intermediaries aid company in
  promoting, selling, distributing goods to final
  buyers
• Include middlemen, physical distribution firms,
  marketing service agencies, financial
  intermediaries
• Retailers wholesalers

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Microenvironment(Internal environment)

• Customer one or more of five different markets
• - consumer markets consumers buy products for
  personal use
• - industrial markets companies buy products to
  produce other products
• - reseller markets
• - government markets
• - international markets

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Microenvironment(Internal environment)

• To be successful, you must satisfy the needs
  wants of consumers better than your competitors
  do
• A public can have an impact on organizations
  ability to achieve its objectives
• A public may be financial, media, government,
  citizen action, local or internal in nature

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Macroenvironment (External environment)

• Demographic environment
• Economic environment
• Natural environment
• Technological environment
• Political/Legal environment
• Cultural environment

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Demographic environment

• Characteristics of human population
• Important trend ageing of population, decrease
  in birth rate, increases in life expectancy,
  increase education level, demand for quality
  products
• Affect targeting strategies

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Economic environment

• Peoples buying power is a function of income,
  prices, savings credit
• Inflation reduces purchasing power
• Interest rates, recession, and recovery have an
  impact on consumer spending
• Consumer spending patterns affect marketers
  product offerings, pricing, promotional
  strategies

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Natural environment

• Natural resources is limited
• Increase cost of energy
• Increase levels of pollution
• Increase awareness of environmental protection

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Technological environment

• Change so quickly in some industries, biological
  science (DNA identification), medical,
  communication system
• Products/services become obsolete very quickly
  and replace by new products/services (Web-based
  shopping, E-commerce, M-commerce)

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Political/Legal environment

• Made up of laws, government agencies pressure
  groups
• Try to maintain favorable condition both foreign
  and domestic
• To gain public support
• i.e.tobacco, clear air

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Social and Cultural environment

• Women entering the work force single-parent
  families are increasing
• Culture diversity affect basic value,
  perception, preferences, religion behaviour
• Long-lasting, from parents to children
• Affect buying behaviours

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Marketing research process

• Define problem determine present situation
• Collect data
• Analyse the research data
• Choose the best ethical solutions

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Consumer buying process

• Problem recognition
• Information seeking
• Evaluation of alternatives
• Purchase decision
• Post purchase evaluation

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What influences consumer behaviour?

• Marketing mix (4Ps) product, price, promotion,
  place
• Sociocultural influences preference groups,
  family, social class
• Psychological influences perception, attitudes,
  learning, motivation
• Situation influences physical surrounding,
  previous experience

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Market Segmentation Major variables

• Geographic segmentation divide the market into
  nations, states, regions, countries, cities or
  neighbourhoods
• Demographic segmentation age, sex, family size,
  income

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Market Segmentation

• Psychographic segmentation social class, life
  style, personality characteristics
• Behaviour segmentation knowledge, attitude,
  use, response to a product
• Other segments user status, buyer readiness
  stage, loyalty status, attitude

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Market Targeting

• Undifferentiated marketing
• Differentiated marketing
• Concentrated marketing

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Undifferentiated marketing

• Ignore market segment differences
• Go after the whole market with one market offer
• Develop a product aimed at the broadest segment
  of the market

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Differentiated marketing

• Operate in several segments of a market
• Design separate offer for each
• Could lead to higher sales than undifferentiated
  marketing
• Also increase promotion, inventory, other cost

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Concentrated marketing

• Focus on a single market segment
• Go after a large share of one or a few
  sub-markets
• Increase risk consumer tastes may change or
  competitors may enter the market
• But if the segment is chosen served well, can
  earn a high rate of return on investment

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Market Positioning

• Once decided which segments to enter, the next is
  to decide what positions the company wants to
  occupy in those segment
• Products position the place the product
  occupies in consumers minds relative to
  competing products

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Marketing Mix (4 Ps)

• Product
• Price
• Promotion
• Place

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Products

• Any physical good, service, or idea that
  satisfied a want or need
• Three levels of Product
• - core product
• - formal (actual) product
• - augmented product

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Core Product

• All core benefits or services offered to
  customers
• E.g. the core benefit of a car convenience,
  comfort

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Formal product

• Five characteristic
• Quality level
• Features
• Styling
• Brand name
• packaging

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Augmented product

• Total benefits perceived by customers
• Include installation, free delivery, warranty,
  repair maintenance services

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The Product Life Cycle
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Introduction

• Market development
• Focus on making potential customers aware
• Slow sales growth
• Profits nonexistent
• Heavy expenses

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Growth

• Rapid market acceptance
• Increase market share
• Substantial profit improvement

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Maturity

• Achieved acceptance by most of potential buyers
• Slowdown in sales growth
• Profits stabilize or decline

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Decline

• Sales show a strong downward drift
• Profit erode

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Product Development Process

• Product ideas
• Screening
• Concept testing
• Business analysis
• Prototype development
• Product testing test marketing
• Commercialization