Week 1 | What is marketing

Question 1

What is marketing?

Answer 1

Marketing is the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

Question 2

Think like a marketer

Answer 2

Every time you see advertising, ask yourself the following questions: Who is the target audience and what is the message? What is the communications strategy used? Why are they choosing this particular time of the day, week, season or even phase of the marketing campaign? Why are they saying it here, in this particular medium? Why did they choose this particular person to say it, e.g. a celebrity, an authoritative person or someone similar to the target audience? What do they want their audience to do, e.g. buy now, consider the brand, change their beliefs or attitudes? What is the call to action trigger?

Question 3

Marketing isn’t just for products

Answer 3

• Services
• Ideas
• People
• Places

Question 4

Needs, wants and demands

Answer 4

• Needs are states of felt deprivation, e.g. ‘I need a car to commute to work’.
• Wants are the manifestation of human needs, as shaped by culture and individual personality, e.g. ‘I want a Mercedes Benz’.
• Demands are human wants that are backed by buying power, e.g. ‘I can afford a Kia’.

Question 5

Market offerings

Answer 5

People satisfy their needs and wants by exchanging value with the marketer. In exchange for their money, and usually some time and effort, they obtain a ‘market offering’,

Question 6

Value, satisfaction and quality

Answer 6

Customer value can be summed up as the sum of total benefits minus total costs. Customer benefits is the bundle of economic, functional and psychological benefits customers expect from a product. Customer costs is the bundle of costs customers expect to incur in evaluating, obtaining, using and disposing of the offering . This can be monetary, time, energy or mental costs.

Question 7

Exchange

Answer 7

Exchange is the act of obtaining a desired object from someone offering something in return. For it to occur, the following conditions are necessary:

• At least two parties present.
• Something of value the other wants.
• Ability to communicate offer.
• Freedom to accept or reject.
• Desire to deal with other party.

Question 8

Transaction

Answer 8

A transaction is a trade between two parties that involves at least two things of value, agreed-upon conditions, a time of agreement and a place of agreement.

Question 9

What is a market

Answer 9

A market is the set of all actual and potential buyers of a product. These buyers share a need or want that can be satisfied through exchange. This represents the overall potential market. The actual market depends on the number of people who exhibit the need, have resources and authority to engage and are willing to offer these resources in exchange for what they want.

Question 10

What are marketing management philosophies?

Answer 10

An organisation’s marketing management philosophy influences their behaviour and characteristics and how they interact with their customers.

Question 11

Production Philosophies

Answer 11

For those companies who believe in this philosophy, the emphasis is manufacturing efficiency.

• The focus is on the internal capabilities of the organistion to develop and produce better, cheaper and widely available products.
• It doesn’t consider where the products also meet the needs of the marketplace - but allows continuous improvements to be made.

Question 12

Sales Philosophies

Answer 12

For those companies who believe in this philosophy, the focus is on selling existing products.

• Generally, large-scale and aggressive selling and promotional efforts are used, so there is an inward focus on staff.
• Buys into the belief that high sales equate to high profits
• Useful when organisations have over capacity.

Question 13

marketing Philosophies

Answer 13

For those companies who believe in this philosophy, the emphasis is on customer needs and wants and delivering the desired satisfaction better
than competitors.

• Belief is that customer satisfaction happens when the focus is on the customer, whereas previous philosophies focused first on company needs.

Question 14

Relationship Philosophies

Answer 14

For those companies who believe in this philosophy, they expand the marketing orientation focus from making a sale that meets the needs and wants of the marketplace to the value of the repeat sale.

• Efforts are dedicated towards establishing a relationship with the customer rather than a cone time exchange.
• It recognises that other parties that complement or aid in facilitating the exchange as being essential to success, e.g suppliers.

Question 15

Societal Philosophies

Answer 15

For those companies who believe in this philosophy, they expand the marketing orientation focus from making a sale that meets the needs and wants of the marketplace to the value of the repeat sale.

• Efforts are dedicated towards establishing a relationship with the customer rather than a cone time exchange.
• It recognises that other parties that complement or aid in facilitating the exchange as being essential to success, e.g suppliers.

Question 16

The marketing mix

Answer 16

This is where all the fun begins—where marketers become like artists. Just as a painter mixes and uses colour to form visually attractive images, a marketer uses the four Ps to create something that appeals to the consumer. Trade-offs are made between the price and the product features, the place where it is made available and the promotion it
receives. The whole marketing mix is a jigsaw puzzle and you need to work out where to put all the pieces

Question 17

The 4 Ps

Answer 17

Product
Price
Place/Placement
Promotion

Question 18

The 4cs

Answer 18

Customer needs
Costs
Convenience
Communication

Question 19

Product

Answer 19

A product is either a tangible good or an intangible service that is need to meet a specific customer need or demand. All products follow a logical product life cycle and it is vital for marketers to understand and plan for the various stages in this cycle and their unique challenges. It is key to understand those problems that the product is attempting to solve. The benefits offered by the product and all its features need to be understood and the unique selling proposition of the production need to be studies. In addition, the potential buyers of the product need to be identified and understood.

Question 20

Price

Answer 20

Price covers the actual amount the end user is expected to pay for a product. How a produce is priced will directly affect how it sells. This is linked to the perceived value of the product to the customer rather than an objective costing of the product on offer. If there is a positive customer value, then a product may be successfully priced higher than its objective monetary value. Conversely, if a product has little value in the eyes of the consumer, then it may need to be under-priced to sell.

Question 21

Customer value–based pricing

Answer 21

Setting the price based on buyers’ perceptions of value.

Question 22

Cost-based pricing

Answer 22

Setting prices based on the costs for producing, distributing and selling the product, plus a fair rate of return for the company’s effort and risk.

Question 23

Competitor-based pricing

Answer 23

Setting prices based on competitors’ strategies, costs, prices and market offerings.

Question 24

Place

Answer 24

Place or placement has to do with how the product will be provided to the customer. Distribution is a key element of placement. This placement strategy will help assess what channel is the most suited to a product. How a product is accessed by the end user also needs to compliment the rest of the product strategy.

The choice of supply chain, distribution channels, value creation and retailing and wholesaling are all factors to consider in this area of the marketing mix.

Question 25

Promotion

Answer 25

Marketing communication strategies and techniques all fall under the ‘promotion’ heading. These may include advertising, sales promotions, special offers and public relations. Whatever the channel, it is necessary for it to be suitable for the product, price and the end user it is being marketed to. It is important to differentiate between marketing and promotion. Promotion is just the communication aspect of the entire marketing function.

Question 26

What does AIDA stand for?

Answer 26

Attention
Interest
Desire
Action