Contents
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Marketing Fundamentals
Rationale
A Marketing Oriented firm (also called market orientation, the marketing concept, consumer focus, or customer focus) is one that allows the wants and needs of customers and potential customers to drive all the firm's strategic decisions. The firm's corporate culture is systematically committed to creating customer value. The rationale is that the more a company understands and meets the real needs of its consumers, the more likely it is to have happy customers who come back for more, and tell their friends. This process can entail the fostering of long term relationships with customers. In order to determine customer wants, the company usually needs to conduct some form of marketing research. Overall, the marketer expects that becoming marketing oriented, if done correctly, will provide the company with a sustainable competitive advantage. The concept of marketing orientation was developed in the late 1960s and early 1970s at Harvard University and at a handful of forward thinking companies. It replaced the previous sales orientation that was prevalent between the mid 1950s and the early 1970s, and the production orientation that predominated prior to the mid 1950s. Since the concept was first introduced in the late 1960s, it has been modified, repackaged, and renamed as "customer focus", "the marketing philosophy", "market driven", "customer intimacy", "consumer focus", "customer driven", and "the marketing concept". |
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A marketing oriented firm will typically show the following characteristics:
1. Extensive use of various marketing research techniques
2. Broad product lines
3. Emphasis on a product's benefits to customers rather than on product attributes
4. Use of product innovation techniques, such as; brainstorming, concept testing, and force field analysis.
5. The offering of ancillary services like credit availability, delivery, installation, and warranty
6. Customer satisfaction and complaint monitoring procedures, including; exit interviews, customer complaints database, and Web and telephone information hotlines.
7. Organisational structure in which the marketing manager reports directly to the CEO.
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Teaching and Learning Resources
The Marketing Principles
- An Overview of Marketing
- Marketing in the 21st Century
- Analysing the Current situation
- Gathering Marketing Information
- Market Segmentation, Targeting and Positioning
- Understanding Consumer and Business Markets
Marketing is a social and managerial function associated with the process of researching, developing, promoting, selling, and distributing a product or service.
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A Marketing Plan is a written document that details the actions necessary to achieve a specified marketing objective(s). It can be for a product or service, a brand, or a product line. It can cover one year (referred to as an annual marketing plan), or cover up to 5 years.
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A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use.
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Business Performance Management (BPM) is a set of processes that help organizations optimise business performance. BPM is seen as the next generation of business intelligence (BI). BPM is focused on business processes such as planning and forecasting. It helps businesses discover efficient use of their business units, financial, human, and material resources.
- History
- What is BPM?
- Metrics / Key Performance Indicators
- Application software types
- Designing and implementing a business performance management programme
Financial Analysis is the analysis of the accounts and the economic prospects of a firm or project.
Market Share, in strategic management and marketing, is the percentage or proportion of the total available market or market segment that is being serviced by a company.
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It can be expressed as a company's sales revenue (from that market) divided by the total sales revenue available in that market. It can also be expressed as a company's unit sales volume (in a market) divided by the total volume of units sold in that market.
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Competitor Analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors.
- Competitor array
- Competitor profiling
- Media scanning
- New competitors
- See also
- References
- External links
Market Segmentation is the process in marketing of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs. Because each segment is fairly homogeneous in their needs and attitudes, they are likely to respond similarly to a given marketing strategy. That is, they are likely to have similar feeling and ideas about a marketing mix comprised of a given product or service, sold at a given price, distributed in a certain way, and promoted in a certain way.
Small segments are often termed niche markets or specialty markets.
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The process of segmentation is distinct from targeting (choosing which segments to address) and positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers; to prioritise the groups to address; to understand their behaviour; and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment.
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- Acronyms for Market Segments
- Consumer behaviour
- Demographics
- Marketing
- Personalization
- Personalized marketing
- Target market
- Target audience
- References
Customer Information
Tutorials
- Consumer decision-making
- Business-to-Business Marketing
- Segmenting and Targeting Markets
- Decision Support Systems and Marketing Research
Readings
Buyer Decision Processes are the decision making processes undertaken by consumers in regard to a potential market transaction before, during, and after the purchase of a product or service.
More generally, decision making is the cognitive process of selecting a course of action from among multiple alternatives. Common examples include shopping, deciding what to eat. Decision making is said to be a psychological construct. This means that although we can never "see" a decision, we can infer from observable behaviour that a decision has been made. Therefore we conclude that a psychological event that we call "decision making" has occurred. It is a construction that imputes commitment to action. That is, based on observable actions, we assume that people have made a commitment to effect the action. In general there are three ways of analysing consumer buying decisions. They are: Economic models - These models are largely quantitative and are based on the assumptions of rationality and near perfect knowledge. The consumer is seen to maximize their utility. See consumer theory. Game theory can also be used in some circumstances. Psychological models - These models concentrate on psychological and cognitive processes such as motivation and need reduction. They are qualitative rather than quantitative and build on sociological factors like cultural influences and family influences. Consumer behaviour models - These are practical models used by marketers. They typically blend both economic and psychological models
Nobel laureate Herbert Simon sees economic decision making as a vain attempt to be rational. He claims (in 1947 and 1957) that if a complete analysis is to be done, a decision will be immensely complex. He also says that peoples' information processing ability is very limited. The assumption of a perfectly rational economic actor is unrealistic. Often we are influenced by emotional and non-rational considerations. When we try to be rational we are at best only partially successful. |
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- Models of buyer decision making
- Decision making style
- Cognitive and personal biases in decision making
Business-to-Business (B2B) stands for relations between enterprises, contrary to relations between enterprises and other groups (e.g. consumers, public administration). The term is today used in marketing however it was established to describe the electronic communication relations between enterprises in order to distinguish it from the communication between enterprises and consumers B2C.
While in former times one spoke primarily of industrial marketing or capital goods marketing, today the term B2B-Marketing is widely used. B2B-Marketing covers all products and services used by enterprises. B2B marketing is considered more complex than B2C marketing because on the buyer´s side, there is often more than one person involved in a B2B sale, the buying centre.
Target Market is the market segment to which a particular product is marketed. It is often defined by age, gender and/or socio-economic grouping.
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Targeting Strategy is the selection of the customers you wish to service. The decisions involved in targeting strategy include:
There are three steps to targeting:
Targeting strategy decisions are influenced by:
Targeting can be selective (eg.: focus strategy, market specialization strategy or niche strategy), or extensive (eg.: full coverage, mass marketing, or product specialization). |
Targeting
After the process of segmentation the next step is for the organisation to decide how it is going to target these particular group(s). There are three targeting options an organisation can adopt.
In marketing, Positioning is the technique by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. It is the 'relative competitive comparison' their product occupies in a given market as perceived by the target market.
Positioning is something (perception) that is done in the minds of the target market.
A product's position is how potential buyers see the product. Positioning is expressed relative to the position of competitors. The term was coined in 1969 by Al Ries and Jack Trout in the paper "Positioning" is a game people play in today’s me-too market place" in the publication Industrial Marketing.
Re-positioning involves changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market.
De-positioning involves attempting to change the identity of competing products, relative to the identity of your own product, in the collective minds of the target market..
- Marketing
- Marketing management
- Target market
- Product management
- Market segment
- Product differentiation
- Proximity mapping
- Marketing plan
- Sustainable competitive advantage
- Strategic management
- Marketing strategies
- Placebo (origins of technical term)
- Lists
- References
Research is the search for and retrieval of existing, discovery or creation of new information or knowledge for a specific purpose. Research has many categories, from medical research to literary research. 'Marketing research' is a form of business research.
Marketing research is divided into Consumer Marketing Research and Business-to-Business (B2B)Marketing Research, or Business Marketing Research, previously known as Industrial Marketing Research.
B2B Marketing Research investigates the markets for products sold by one business to another, rather than to consumers.
Consumer Marketing Research is a form of applied sociology which concentrates on understanding the behaviours, whims and preferences, of consumers in a market-based economy. The field of consumer marketing research as a statistical science was pioneered by Arthur Nielsen with the founding of the AC Nielsen Company in 1923.
In addition to marketing research, other forms of business research include:
Market research is broader in scope and examines all aspects of a business environment. It asks questions about
competitors, market structure, government regulations, economic trends, technological advances, and numerous other factors that make up the business environment. (See Environmental scanning.) Sometimes the term refers more particularly to the financial analysis of companies, industries or sectors. In this case, financial analysts usually carry out the research and provide the results to investment advisors and potential investors.
Product research - This looks at what products can be produced with available technology, and what new product innovations near-future technology can develop. (see New Product Development)
Advertising research - This attempts to assess the likely impact of an advertising campaign in advance, and also measure the success of a recent campaign..
Managing the Marketing Elements: Product and Distribution Decisions
Tutorials
- Product and Services Concepts
- Developing and Managing Products
- Marketing Channels and Logistics Decisions
- Retailing
Readings
In business and engineering, New Product Development is the complete process of bringing a new product to market. There are two parallel aspects to this process : one involves product engineering ; the other marketing analysis. Marketers see new product development as the first stage in product life cycle management, engineers as part of Product Lifecycle Management.
- Flexible product development
- Time to market
- Social design
- Product management
- Product life cycle management
- brand management
- marketing
- Engineering
- product
- Document management
- Association of International Product Marketing & Management
- Product Development and Management Association (PDMA)
- References
Product Concepts Case Studies
Marketing Mix
Tutorials
- The Marketing Mix - Product Strategies
- The Marketing Mix - Pricing Strategies
- The Marketing Mix - Distribution Strategies
- The Marketing Mix - Promotion Strategies
- Marketing communication and personal selling
- Advertising, sales promotion and public relations
- Financial aspects of marketing
- Electronic marketing
- Pricing concepts
Readings
Product Management is a function within a company dealing with the day-to-day management and welfare of a product or family of products at all stages of the product lifecycle.
The product management function is responsible for defining the products in the marketing mix. Product management typically deals with:
- Defining new products and gathering product requirements (New Product Development)
- Defining product business criteria including managing costs
- Securing internal resources for product team
- Translating feature requirements into engineering specifications
- Working across all functions to bring a product to launch
- Leading teams to ensure execution towards product objectives
- Defining supportability requirements
- Promoting the product internally across all functions
- Promoting the product externally with press, customers, and partners
- Bringing new products to market
- Product differentiation
- Product positioning and outbound messaging
- Product Life Cycle considerations
- Product portfolio management
Product management may also represent an organization's approach to the process of managing and marketing its products and services as smaller businesses inside the larger enterprise, supported by multi-function product teams (led by product managers) and a standard product development process.
Product management typically deals with all of the end-to-end aspects of a product or product line, including product profitability.
It may be split with the closely-related functions:
See also
- Product
- Product manager
- Product marketing
- Product planning
- Marketing management
- Brand management
- Software product management
Pricing is one of the four p's of the marketing mix. The other three aspects are product management, promotion, and place. It is also a key variable in microeconomic price allocation theory
| Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance but may prevent pricing errors. |  |
Questions involved in pricing
Pricing involves asking questions like:
1. How much to charge for a product or service? While this is the way most businesses think about pricing, since it focuses on what the business sells, the real question is how much do customers value what they are buying?
2, What are the pricing objectives?
3. Do we use profit maximization pricing?
4. How to set the price?: (cost-plus pricing, demand based or value-based pricing, rate of return pricing, or competitor indexing)
5. Should there be a single price or multiple pricing?
6. Should prices change in various geographical areas, referred to as zone pricing?
7. Should there be quantity discounts?
8. What prices are competitors charging?
9. Do you use a price skimming strategy or a penetration pricing strategy?
10. What image do you want the price to convey?
11. Do you use psychological pricing?
12. How important are customer price sensitivity and elasticity issues?
13. Can real-time pricing be used?
14. Is price discrimination or yield management appropriate?
15. Are there legal restrictions on retail price maintenance, price collusion, or price discrimination?
16. Do price points already exist for the product category?
17. How flexible can we be in pricing? : The more competitive the industry, the less flexibility we have.
- The price floor is determined by production factors like costs
- The price ceiling is determined by demand factors like price elasticity and price points
18. Are there transfer pricing considerations?
19. What is the chance of getting involved in a price war?
20. How visible should the price be? - Should the price be neutral? (ie.: not an important differentiating factor), should it be highly visible? (to help promote a low priced economy product, or to reinforce the prestige image of a quality product), or should it be hidden? (so as to allow marketers to generate interest in the product unhindered by price considerations).
21. Are there joint product pricing considerations?
22. What are the non-price costs of purchasing the product? (eg.: travel time to the store, wait time in the store, disagreeable elements associated with the product purchase - dentist -> pain, fish market -> smells)
23. What sort of payments should be accepted? (cash, cheque, credit card, barter)
Distribution is one of the four aspects of marketing. A distributor is the middleman between the manufacturer and retailer. After a product is manufactured by a supplier/factory, it is typically stored in the distributor's warehouse. The product is then sold to retailers or customers. The other three parts of the marketing mix are product management, pricing, and promotion.
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Promotion is one of the four aspects of marketing. The other three parts of the marketing mix are product management, pricing, and distribution. Promotion involves disseminating information about a product, product line, brand, or company.
Promotion comprises four subcategories:
The specification of these four variables creates a promotional mix or promotional plan. A promotional mix specifies how much attention to pay to each of the four subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image.
An example of a fully integrated, long-term, large-scale promotion is Pepsi Stuff.
See also
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Above a pull strategy (left) push strategy (right).
The World of Marketing
Tutorials
Readings
Recommended Text
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Essential Marketing Skills
Check the availability and buy your books from our Bookshop |
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Essentials
of Marketing
Check the availability and buy your books from our Bookshop |
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SUN TZU STRATEGIES FOR MARKETING, Gerald Michaelson Check the availability and buy your books from our Bookshop |
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Essential Law for Marketers (Chartered Institute of Marketing (Paperback) Check the availability and buy your books from our Bookshop |
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