Warwick Business School

Dr. Yansong Hu

+(0) 24 7652 3915

Yansong.hu@wbs.ac.uk

Session 1Introduction

Marketing ConceptsMarketing EnvironmentMarket Segmentation

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Assessment

Multiple choice

Closed book

Two hours

Sixty questions in total, 15 for each of the 4 subjects

Exact time and place of the exam will be announced

later

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Administrative Details

Office Hours: normally 2-5pm Wednesday

Or

contacting me at

+44 (0) 24 7652 3915 (24 hours)

Yansong.hu@wbs.ac.uk (24 hours a day 7 days a week)

Room C2.04 (Dr. Yansong Hu)

Use the my.wbs platform!

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MARKETING MIXCommunications,

Product, Channels,Price

MARKETINGANALYSIS

EnvironmentConsumers Buying

Behaviour

SEGMENTATIONMARKET

SEGMENTATION

CUSTOMER-CENTRIC MARKETING MANAGEMENT PROCESS

(HU,2011)

Session 1Session 2

Session 1

Session 2Session 3

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Agenda

How Do We Understand Marketing?

Marketing Environment

Market Segmentation

Why?

How?

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Marketing: Some Quotes

Marketing in History

“In well-ordered states, storekeepers and salesmen are commonlythose who are weakest in bodily strength and, therefore, of little usefor any other purpose,” Plato

“Merchants are to be accounted vulgar; for they can make no profitexcept by a certain amount of falsehood,” Cicero

“Advertising ... is a meretricious endeavor in which psychologicalappeals to ‘fear’ and ‘shame’ are developed to bamboozle the publicinto purchasing essentially worthless packaged goods at bloatedprices,” Thorstein Veblen

“Marketers are intrepid, far-sighted adventurers: Indiana Jones andthe Crystal Ball,” Anonymous

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Marketing: More Quotes

A Modern View

“Corporate leaders nationwide are discovering that their mostpowerful competitive weapon is marketing -- the development,pricing, distribution, and promotion of products,” Newsweek

“Marketing is now central to success at any company in anybusiness, and it is going to make the difference between winners andlosers,” Stephen Greyser, Harvard Business School

“Stop being a company with its face towards the CEO and asstowards the customer,” Jack Welch, CEO, G.E.

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What is Marketing?

Marketing as a business philosophy

• Meeting the evolving needs and wants ofconsumers better than competitors to make aprofit

Marketing as a business function

• The analysis, planning, implementation andcontrol of programmes designed to create,build and maintain beneficial exchanges withtarget buyers

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Economic

Cultural

Environmental

Social Political

Technological

Legal

Customers

The Company Shareholders

Publics Suppliers

Competitors

Intermediaries

MarketingStrategy

Internal &Immediate

Environment(Micro)

ExternalEnvironment

(Macro: PESTLE)

Scanning & Sensing: The MarketingContext

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The Political and Legal Context

Opportunities

• GE wind turbine in EU

Threats

• Japan Earthquake

Three business strategies

(1). Passive reaction

(2). Positive anticipation (BT)

(3). Proactive public policy shaping (Hiring lobbyists, Pressinglawsuits)

- Disneyland and Sweden

Political

Legal

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Economic Context: Credit Crunch

Challenge about market system

Regulations

Economic

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The Social and Cultural Context

The greymarket

The youthmarket

Multi-ethnicsocieties

Changinglifestyles and

living patterns

Demographicchange

Social

Cultural

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The Social and Cultural Context

Actors’ Web inHollywood:

Kevin Bacon Game

Two actors areconnected if theyhave appeared in amovie together.

Then any givenactor in history is onaverage 3 moviesaway from KevinBacon!Path from Kevin Kline to Kevin Bacon= 3 (as of 1995)

Kevin Bacon

Social

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Technological Context

Technological

Microwave Oven

Disposable Diaper

Birth Control Pill

Home VCR

Pocket Calculator

Personal Computer

Fax Machine

Touch-ToneTelephone

Fiber-Optic Systems

Photocopier

Computer Disk Drive

This list was compiled in the early 1990s. Anything else youwould add?

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Why Segment the Market: from MassMarketing to Market Segments Henry Ford: customers could buy the Model T in

any color they wished – as long as it was black

Black Model Ts gave way to GM’s strategy of

market segmentation

Mass Marketing

GMFord Model T

Market Segment (s)

…

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How to Do It: STP Process

Segmentthe Market

Group customerswith similar needs &preferences

Select TargetSegments

Select the mostattractive segments

DecideMarketing Mix

EstablishSegment

Positioning

Ensure thatcustomers in eachsegment perceivethat we can satisfytheir needs &preferences betterthan competitors

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STP: Ways to Segment a Consumer Market

Demographic

Age, gender, income, occupation, family

Geographic

Country, region, city, climate

Psychographic

Lifestyle, personality

Behavioral

Occasions, benefits, use status, usage rate

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Measurability: ability to obtain informationabout the size, nature, and behavior of a marketsegment

Accessibility: degree to which segments canbe reached, either through targeted advertisingand communication programs or multiple retailchannels

STP: Target Market Selection Criteria

Substantiality: size of the market—is it largeenough to be profitable?

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STP: Positioning

Positioning:

An attempt to manage how potential customersperceive a product or service

Volvo positions its vehicles in terms of durability andsafety

Apple: elegant in design and user friendly

Swatch

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STP: Positioning

A touch of class/a car to be proud to own

Practical/affordable/good gas mileage

Fun to drive/sportylooking/appeals toyounger people

Conservativelooking/appeals toolder people

Lincoln

Cadillac

Mercedes

ChryslerBuick

Oldsmobile

Porsche

BMW

Pontiac

Ford

Dodge

Plymouth

Chevrolet

Nissan

Toyota

VW

Perceptual MappingExample: automobiles

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Key TakeawaysWhat is Marketing

Marketing as a business philosophy

Marketing as a business function

Marketing Environment

PESTLE

STP

Why?

How?

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Additional Readings

Relevant chapters (i.e., marketing concepts, marketingenvironment, and segmentation) in• Marketing : an introduction / Gary Armstrong, PhilipKotlerOr• Marketing management [electronic resource] / PhilipKotler ... [et al.].