Principles of Marketing

Question 1

IDEAL BUSINESS SCENARIO

Answer 1

High market demand, no competition

Note: Most small businesses don’t have a marketing plan but are still successful. It’s because many of them operate in the ideal business scenario (high market demand and no competition).

Question 2

80% Failure Rate

Answer 2

80% of New Product Launches and Advertisements Fail.
Why?

Unsuccessful managers try to “create needs”

Successful managers try to “discover unmet needs” and do it better than the competition through positioning.

Question 3

Competition Act

Answer 3

You can’t put your competition out with unethical methods like predatory pricing. You can only put your competition out of business by having a better product.

Question 4

Why are NEEDS important?

Answer 4

A high percentage of purchases are aimed at satisfying one or more of Maslow’s Hierarchy of Needs:

1. Physiological Needs (food, water, air, shelter, sex)
2. Safety & Security Needs (protection, order, stability)
3. Social Needs (affection, friendship, belonging)
4. Ego Needs (prestige, status, self-esteem)
5. Self-Actualization (self-fulfillment)

Note: You can meet more than one need at a time. Maslow wanted these needs to be visualized as a ladder (contrary to the popular pyramid which he didn’t actually create) where each level of need is a rung and you can touch them all at once, or some before others.

Question 5

Link to Tension and Insecurity to each of Maslow’s Stages

Answer 5

Feeling Attractive <—> Feeling Unattractive
Feeling Satiated <—> Feeling Hungry
Feeling safe/secure <—> Feeling unsafe/insecure
Feeling appreciated & loved <—> Feeling unloved & unappreciated
Feeling a sense of status <—> Feeling low status
Feeling financially secure <—> Feeling financially insecure

Products are a “means to an end” of an unmet need. Consumers behave consciously and unconsciously in ways that reduce the tension caused by having unmet needs.

Question 6

Means/Ends Analysis

Answer 6

The end = Feeling Good about Oneself (Esteem Need)

The end is achieved by….

Means (e.g. exercise) and the goal-object (e.g. join a health club).

So if your goal is to join a health club, your means will be to exercise and this will lead you to feel good about yourself.

In means-ends analysis, one solves a problem by considering the obstacles that stand between the initial problem state and the goal state. Its proposal is to understand how consumers translate product or service characteristics and consequences of use into personal self-relevant values.

To illustrate, consider the example of a consumer choice mentioned previously: why does a soccer mom drive an SUV instead of a mini-van? The value chain begins with a product attribute, such as the SUV “does not have sliding doors.” The functional consequence of not having sliding doors is that an SUV “has a more stylish design.” The psychosocial or emotional consequence of having a stylish design is that “I feel trendy driving it.” Finally, the underlying personal value that feeling trendy might appeal to is “acceptance of me personally by my peers.”

POINT: The person using your product doesn’t really care about the objective of the product, they care about self-relevant values. You need to meet a person’s values for them to appreciate and see the value of your product.

Question 7

Principle 1

Answer 7

Marketers will be more successful if they try to discover needs rather than try to create needs.

Creating isn’t a success example -> Alchemy trying to make gold is still yet to succeed.
Be a panner, not an alchemist. Panners go out and mine for gold to discover it.

Question 8

Principle 2

Answer 8

The key to achieving sales success is to provide products that satisfy consumer needs, wants and desires better than the competition through POSITIONING.

Question 9

Marketing Mix (4Ps)

Answer 9

Price: You could do price better by having a lower price (i.e. List price, discounts, bundling, credit terms)

Place: When is your company open for service? Where is your company located? What time of hours is your company open (operational hours). (i.e. Channel, Inventory, Distribution, Logistics)

Product: How well does your product carry out its meeting of needs? (i.e. Functionality, Brand, Packaging, Services)

Promotions: you are better at letting your audience know what you offer than your competition (i.e. Advertising, Sales Force, Publicity, Sales Promotion)

Question 10

Principle 3

Answer 10

Value drives sales (not quality)
- the essence of marketing creating customer value that is greater than the value created by competitors.

Value = Perceived Benefits ÷ Price Paid

Question 11

Principle 4

Answer 11

• in a competitive market, businesses must differentiate themselves from the competition.
• Differentiation can be achieved through positioning.

Think of the positioning matrix (see PPT 1, slide 14 for an example). You want to occupy a different space on the matrix map. Positioning allows you to lower the number of competitors. One way to “eliminate” competition is to occupy an empty spot on the positioning matrix.

Question 12

Principle 5

Answer 12

FOCUS is required to succeed.
Businesses must have: a clearly defined target market and, the marketing mix (4Ps) must be designed to satisfy the needs of a “specific” target market.

Note: The target market has the need for the product, the authority to make purchase decisions, and the money to buy the product.