Marketing ManagementMNM202-Y

MND203-S

The nature of marketing

Marketing is the process of planning and executing the conception,

pricing, marketing communication and distribution of ideas, products, and services to create exchanges

that satisfy individual and organisational goals.

Marketing is about satisfying needs

The concept of exchange

People give up something to receive something they would rather have

Conditions that must be met for exchange to take place:

• At least two parties• Each party must have something of value to the

other• Parties must be able to communicate and deliver• Parties must be free to accept or reject the offer• Each party must want to deal with the other

The marketing “gaps”

Gaps that exist between production and consumption that are bridged by marketing:

• Space gap• Time gap• Information gap• Ownership gap• Value

Important concepts

• Needs and wants and demands• Products• Value• Satisfaction• Market• Intermediaries

Orientation towards markets

Production orientation• What can we do best?

Sales orientation• Sell - no matter what

Marketing orientation• Satisfy the consumer

profitably by working together

Societal orientation• Do what we do without harming society

The marketing concept - NB Satisfy the needs of the consumer and society as a whole, profitably, while working together as an

organisation

Consumer satisfaction

Profitability

Organisational integration

Social responsibility

12

3 4

Relationship marketing

1. A broader view of the market (long term)2. Expansion of the marketing offering (6p’s)3. A bigger market

The marketing process (Fig 1.3)

The marketing environment

Marketing research

Process of designing, gathering, analysing and reporting information that

may be used to solve a specific marketing issue

Questions to answer:• Who is the market?• How do we segment the market?• What are the wants and needs of the market?• How do we measure the market?• Who are our competitors?• Which model of the product will best suit the market?• What is the best price?• How will we communicate with the customers?

The marketing information system

A system for generating and managing a flow of information for

marketing decision making

Components:• Internal reporting sub-system• Marketing intelligence sub-system• Statistical sub-system• Marketing research sub-system

The marketing research process

Data sources

Sampling methods

Probability sampling:• Simple random sampling• Stratified random sampling• Cluster sampling

Non-probability sampling• Convenience sampling• Judgment sampling

Market potential vs Sales potential

Market potential: The maximum possible sales of a specific product in a specific

market over a specific period of time for all sellers in the industry.

Sales potential: The upper limit of sales that a firm could possibly reach for a

specific product in a specific market over a specific time period.

Market potential and sales forecasting

Levels of market measurement:• Consumer level• Product level• Geographic level• Time level

Relevant markets for measurement:• Total market• Available market• Target market• Penetrated market

Methods for estimating market and sales potential:• Breakdown methods• Build up methods

Market potential and sales forecasting

Market forecast: An estimate of the expected sales of a specific product in a

specific market over a specific time for all sellers in the industry

Sales forecast: An estimate of the number of units a firm expects to sell of a specific

product in a specific market over a specific time

Forecasting methods

•Sales force surveys•Expert surveys•Time series analysis

Consumer behaviour

Types of purchase decisions:

• Complex purchase decisions• Dissonance reducing behaviour• Habitual purchasing behaviour• Variety-seeking purchase behaviour• Routine decision making• Impulsive decision making

Consumer behaviour

Individual Factors

Motivation

Things to remember:

• Definition• Levels of motives• Maslow’s hierarchy of needs

Perception

Things to remember:

• Definition• Sensory stimuli• Perceptual defence mechanisms

Things to remember:

• Definition• Motivation, attention, repetition

Learning ability

Things to remember:

• Definition• Characteristics of attitudes (pg 144)

Attitude

Personality

Things to remember:

• Definition• Examples (pg 145)

Lifestyle

Things to remember:

• Definition• AIO

Group Factors

Opinion leaders

Things to remember:

• Definition• Refer to diffusion process

Culture

Things to remember:

• Definition• Sub-cultures

Family

Things to remember:

• Definition• Phases of family life-cycle• Role differentiation in families

Reference groups

Things to remember:

• Definition• Types of groups• Ways in which groups affect consumers

Market segmentation, targeting and positioning

Market segmentation: The process of dividing a heterogeneous market in to

homogeneous segments

Market targeting: The process of deciding which segment to pursue

Product positioning: The way customers perceive products relative to the

competition

Segmentation

Why segment?Why not segment?Prerequisites for market segmentation also known as criteria for a segment to be effective:

• Measurable• Large enough• Accessible• Actionable• Differentiable

Bases for segmentation

•Geographic

•Demographic

•Psychographic

•Behavioural

Market targeting

• Concentrated targeting (one segment)• Differentiated targeting (a few segments)• Undifferentiated targeting (all segments)

Product positioning

Positioning methods

• Attribute positioning• Benefit positioning• Use/application positioning• User positioning• Competitor positioning• Product category positioning• Quality/price positioning

Chapter Six – Integrate it all

Product

Price

Place

Promotion