marketing management Flashcards
what is marketing
- The route to achieving the social objectives, which lies in successfully meeting the expectations of their customers
- As supply has outsripped demand in many industries, the customers choice has increased
- Supply chain has shifted from manufacturer, to retailer/supplier, to end customer
- In such a world, organisations that don’t have customer satisfaction at the core of their strategic decision making will find it increasingly hard to survive -
(Hooley et al. 2017: 5)
● Definition: the strategic business function that creates value by stimulating and fulfilling customer demand
- It does so by building brands, nurturing innovation, developing relationships, good customer service
- Marketing brings positive ROI, satisfies share/stakeholders and contributes to a sustainable business future
what is The Evolution of the Marketing Concept
The production era (until ~1930)
Seller’s market when demand is greater than supply because it focuses on the most efficient ways to produce products. Market seen as a homogeneous
group that will be satisfied with the basic function of a product.
The selling era (1920–1964)
Company-centered approach to business, which means that management tries to move products rather than meet customer needs and wants.
The consumer era (1957–1998)
a customer-centered approach based on finding out what customers want and need with offering and delivering good-quality products (TQM).
The triple bottom line (1998–now)
Need to maximise not just one, but three components:
1. The financial bottom line: Financial profits to stakeholders
2. The social bottom line: Contributing to the communities in which the company operates
3. The environmental bottom line: Creating sustainable business practices that minimize damage to the environment or improve it.
what is the 7 parts of marketing mix
price
place
promotion
process
physical evidence
people
product
what is branding decusions
● Brand: a name, term, symbol or any other unique element of a product that identifies a firm’s product(s) and sets it apart from competition
● Brand identity: the way a company aims to identify or position itself or its product or service; the visual or verbal expressions of a brand which leads to the psychological or emotional associations that the brand aspires to maintain in the minds of the consumer
● Brand image is the way the public perceives this aim
what should brands do
Brands should:
- be memorable
- have a positive connotation
- convey a certain image
what is the role of brands
○ Identify the maker
○ Simplify product handling
○ Organise accounting
○ Offer legal protection
○ Signify quality
○ Create barriers to entry
- Brand awareness, brand insistence
○ Serve as a competitive advantage
○ Secure price premium
what’s the characteristics of world class brands
● The brand excels at delivering the benefits which customers desire
- Constantly researching trends
● The brand stays relevant
- Keeping up with trends
● The pricing strategy is based on consumer’s perceptions of value
● The brand is properly positioned
● The brand is consistent
- It’s the SAME (if there are more chains elsewhere)
● The brand portfolio and hierarchy make sense
● The brand coordinates a full repertoire of marketing activities to build equity
● The brand’s managers understand what the brand means to consumers
● The brand is given proper support
● The company monitors sources of equity
WHAT IS A TRADEMARK
● A legal term for a brand name, brand mark or trade character
- ® is used when a trademark is registered, but even unregistered marks have protection
- In the UK, common law protection exists if the firm has used and established the name over a period of time
● Good brand names - Easy to say
- Easy to spell
- Easy to read
- Easy to remember
- Fit the target market
- Fit the product’s benefits
- Fit the customer’s culture
- Fit legal requirements
what is BRAND ELEMENTS
● Brand names
● Web/URLs
● Slogans
● Characters
● Logos
WHAT IS A BRAND PROMISE
● It’s the marketer’s vision of what the brand must be and do for consumers
● Understanding consumer brand knowledge – all the different things that become linked to the brand in the mind of consumers – is of paramount importance because it is the foundation of brand equity
● Brand knowledge: experiences, feelings, beliefs, images, thoughts
● Emotional branding is engaging the consumer on the level of senses and emotions; forging a deep, lasting, intimate emotional connection to the brand that transcends material satisfaction
what are the MAJOR ELEMENTS OF BRAND EQUITY
● Brand name awareness
- Leading to brand familiarity
● Brand loyalty
- Reduces brand’s vulnerability to competitors action
● Perceived brand quality
- Brand viewed as quality indicator (may support premium prices and ease introduction of brand extensions)
● Brand associations
- Lifestyles, personality types…etc
what’s QUALITY AS A PRODUCT OBJECTIVE
● Total quality management (TQM) is a philosophy that calls for company-wide dedication to the development, maintenance and continuous improvement of all aspects of a company’s operations
● Quality standards
- International Organisation for Standardisation (ISO)
- ISO 9000 : Standards for quality management
- ISO 14000: Standards for environmental management
● Six Sigma methodology
- Process allows no more than 3.4 defects per million units (getting it right 99.997)% of the time)
what is the The Evolution of Marketing
- Mobile marketing – interacting with consumers through mobile devices such as a smartphone
- User-generated content – marketing created by consumers and used in blogs, online reviews, social media, etc.
- Corporate citizenship – refers to the responsibility to the community in which a business operates.
- Big data – increases the ability of marketers to create better products or improve customer service.
● Social and Green Marketing Strategies
- Social marketing concept:
- The social marketing concept maintains that marketers must satisfy customers’ needs in ways that are not only profitable for the firm but also beneficial to society
- Firms practise this philosophy by satisfying society’s environmental and social needs
- Green marketing strategy:
- Effort to choose packages, product designs and other aspects of the marketing mix that are earth friendly but still profitable
what is marketing communications
● The traditional Promotion Mix refers to con=mmunication elements that the marketeer controls
- Mass (one-to-many) communication - personal selling and direct marketing, direct mail and telemarketing
- Personal (one-to-one) communication - personal selling and direct marketing, direct mail and telemarketing
● Purpose - persuade people to do business with a firm
Integrated marketing communications (IMC) are used for planning, executing and evaluating coordinated brand communication programmes over time to targeted audience
Check effectiveness of messages using the DRIP model:
Differentiate the offering
- Remind customers you are there
- Inform them of innovations or changes
- Persuade them to consider you
THE COMMUNICATION MODEL
Encoding Idea translated into physically perceivable from conveying meaning
Message: content of communication that goes from the source to a receiver
Medium communication vehicle reaching members of the target audience
Source and receiver must share a frame of reference
Noise: anything that interferes with effective communication and can block messages
Feedback: to complete the communication loop, the source gets feedback from receivers
WHAT IS INTEGRATED MARKETING COMMUNICATIONS
● Integrated Marketing Communications (IMC): deliver consistent messaging across platforms with a multichannel promotion strategy combining traditional marketing communication with social media and other online activities
WHAT IS IMC Objectives
● Determine campaign purpose, direction and success
● Communications objectives (strategic) and promotional objectives (tactics)
● SMART objectives
MODES OF MARKETING COMMUNICATIONS
● Advertising: pervasiveness, amplified expressiveness, impersonality
● Sales promotion: communication, incentive, invitation
● Personal selling: personal interaction, cultivation, response
● Events and experiences: relevant, involving, implicit
● Public relations and Publicity: high credibility, ability to catch buyers off guard, dramatisation
● Direct marketing and interactive marketing: customised, up-to-date, interactive
● Word of mouth marketing: credible, personal, timely
what is a marketing plan
● Marketing plan: document describes marketing environment,
- Outlines marketing objectives
- Identifies who will be responsible for carrying out each part of strategy
● Setting budget: each cost element of action plan should link to budget item
- Increases accountability for all parties involved in implementing marketing plan
- Helps overall marketing budget forecasting
● Mission statement: describes organisation’s purpose and what it hopes to
what is the smp process
In terms of customers, products and resources
● SMP Process
- Perform situational analysis - SWOT Analysis (Where are we now)
- Set Marketing Objectives - STP Analysis + M.O (Where do we want to be)
- Segmentation, Targeting and Positioning
- Develop Marketing Strategies - Marketing Mix Strategies
- Implement and Control Marketing Plan - What works and doesn’t work
what is a swot analysis
SWOT:
- Used to evaluate internal (S+W) and external (O+T) environments
● Internal environment: controllable elements in a firm
- Key tech, patents, financial stability, supplier rs, reputation, human capital
● External environment: uncontrollable factors outside firm
- PESTLE (political, economic…etc)
● Segmentation, Targeting and Positioning
- Access potential demand (no. of consumers willing/able to pay the offering price)
- Firm will have distinctive competencies to create competitive advantage amongst target consumers
what is SBU objectives and why are they set
Goals and objectives are about what the organisation is trying to achieve
- Objectives should be SMART (specific, measurable, attainable, realistic and sustainable)
what is marketing mix
● Marketing Mix: 7 P’s (product, place, price…etc)
● Implementing and controlling a marketing plan
- Measure actual performance and compare to objectives
what is marketing control a formal process for
Marketing control is a formal process for:
- Measuring performance
- Comparing performance to established marketing and strategy objectives
- Adjusting the objectives or strategies based on this analysis
what are the benefits of planning
Control of marketing activity
- [ ] Insures that targets achieved
- [ ] Insures early warnings of things going wrong
- [ ] Allows corrective measures to be taken soon
Development of marketing activities
- [ ] Analysis environment and highlight strengths and weaknesses
- [ ] Identifies available, options and age choice
- [ ] Help to allocate resources
- [ ] How to handle change?
Coordination of marketing activity
- [ ] Specifies exactly what is expected
- [ ] Integrates different areas
- [ ] Communicates, objectives and plans to staff
- [ ] Reduces internal rivalry
what is setting the right price mean in marketing
SETTING THE RIGHT PRICE
● Price is the value that customers give up or exchange to obtain a desired product
- Payment may be in the form of money, goods, services, favours or anything else that has value to the other party
● Pricing a new product must take into account the conditions of the market and competitors’ prices
● Value placed on what is exchanged
● Highly symbolic
● Consumer’s perspective: functional, quality, operational, financial, personal
● Seller’s perspective: costs, revenue, profit
WHAT ARE THE STEPS IN PRICE PLANNING
- develop pricing, objectives
- Estimate demand
- Determine costs
- Evaluate the pricing environment
- Choose a pricing strategy
- Develop pricing tactics
what are the pricing strategies
PRICING STRATEGIES:
● Skimming price: firm charges a high premium price for its new product with the intention of reducing it in the future in response to market pressures
- High price communicates superior product image
- People may be willing to pay a premium bc they believe it makes a statement about their own worth
● Penetration pricing: new product is introduced at a very low price
- Market is highly price sensitive and low prices stimulate market growth
- Production and distribution costs fall with accomplished production experience
- Low price discourages actual and potential competition
● Trial pricing: product carries a low price for a limited time period
what is Estimate Demand
● Demand refers to a customers’ desire for products.
- How much of a product do consumers want?
- How will this change as the price goes up or down?
WHAT IS PRICE ELASTICITY OF DEMAND
● How sensitive are customers to changes in the price of a product?
● Price elasticity of demand is a measure of sensitivity of customers to changes in price.
- Price elasticity of demand = percentage change in quantity demanded/percentage change in price.
● Influences on price elasticity:
- Availability of substitute goods or services – If a product has a close substitute, its demand will be elastic.
- Time period - The longer the time period, the greater the likelihood that demand will be more elastic.
- Income effect - Change in income affects demand for a product even if its price remains the same.
DETERMINE COSTS
● Average fixed cost is the fixed cost per unit produced (total fixed costs / number of units produced)
● Average fixed cost decreases as the number of units produced increases
Fixed costs brackets overhead) call that don’t vary with sales or productive levels, executive salary rent
Variable costs cost that do vary directly with the level of production, raw materials
Sum of the fixed and variable costs for a given level of production
WHAT IS BREAK EVEN
Break-even analysis examines relationship between cost and price and determines what sales volume must be reached at a given price before the company will completely cover its total costs and post which it will begin making a profit
Evaluate the Pricing Environment
● Analyse competitor’s costs, prices and offers
● Check economic conditions
- e.g., pricing in a recession / responding to inflation
● Look at consumer trends
● Consider nearest competitor’s price
● Evaluate worth to customer for differentiated features
● Anticipate response from competition
● Price competition
● Price is instrument to beat competition (low-cost producer; standardised products)
● Non-price competition
● Product attributes / Brand loyalty / Customer loyalty
CHOOSE A PRICE STRATEGY
● Based on cost, demand, competition and customer needs
● Cost-plus pricing is a pricing method in which the marketer figures all costs for the product and then adds the desired profit per unit
DEVELOP PRICING TACTICS
Price adaption strategies – geographic, compensation deal, buy back arrangements
● Discounts/allowances – cash / quantity / seasonal / allowance discount
● Value pricing refers to re-engineering the company’s operations to become a low-cost producer without sacrificing quality, to attract a large number of value-conscious customers.
● In going-rate pricing, firms base prices on competitors’ prices, charging the same, more or less than major competitors. Smaller firms ‘follow the leader’.
● Perceived-Value Pricing – Buyer’s image of product performance e.g. deliver on time, warranty quality, customer support, supplier reputation, trustworthiness, esteem etc.
PROMOTIONAL PRICING TACTICS
● Loss-leader pricing
● Special-event pricing
● Cash rebates
● Low-interest financing
● Longer payment terms
● Warranties and service contracts
● Psychological discounting
PRICING STRATEGIES BASED ON CONSUMER NEEDS
● Value pricing (EDLP) – offers a fair value to consumers and includes differentiated pricing.
● Demand
- Demand-based pricing means that the selling price is based on an estimate of volume or quantity that a firm can sell in different markets at different prices
- Yield management pricing
what is pricing tactics
PRICING TACTICS
● Price bundling means selling two or more goods or services as a single package for one price.
● Captive pricing is a pricing tactic used when a firm has two products that are used together
