Not just advertising and selling.
A societal/managerial process through which people/groups obtain what they need and want through creating and exchanging products and value with others.
Drucker:
The aim of marketing is to make selling superfluous. The aim is to know and understand the custer so well that the product or service fits and sells itself.
Mistakes
Product orientation:
- It’s good, therefore it will sell
- Or: build a better mousetrap and the world will beat a path to your door
- If the product can be produced more efficiently than others, it will sell
Marketing orientation:
- If we solve the customer’s problem better than anyone else and let them know how we can, it will sell.
What does the customer want?
Black and Decker are not in the business of making drills; they are in the business of making customized holes.
The biggest mistake a company can make: build something that no-one wants
You must focus on customer needs and wants: the customer doesn’t care how good it is or hard it is to build, only the value it provides to them.
People aren’t rational and don’t tell you what they want; they cannot articulate their needs well.
Models to Explain Consumer Behavior
- Problem solving: consumers buy to solve problems
- Psychoanalytical: consumers are emotive buyers
- Cognitive miser: consumers take the easiest option
- Collective decision maker: buy what everyone else is buying
- Economic:
- Treat consumers as rational buyers who buy the best value option to meets their needs
Consumer Influences
Situational:
- Physical
- Societal
- Time
- Motivational
- Mood
Cultural:
- Cultural
- Subcultural
- Societal class
Social:
- Reference groups
- Family
- e.g. bank account; often use same bank as parents
- Roles and status
Personal:
- Demographics
- Age
- Occupation
- Income
- Lifestyle
- Personality
Psychological:
- Motivation
- Perception
- Beliefs/attitudes
- Learning
Product Market
A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various need-satisfying goods or services.
Value proposition: who wants it and what will they pay for it?
Marketing World
The consumer is at the heart of the marketing, but is not necessarily who you sell to; the customer.
B2B companies provide goods/services to other businesses that ultimately provide goods/services to consumers.
The Consumer
Ask:
- Who is the customer?
- Where are they?
- How much money do they have?
- WHat drives them?
- What do they need?
- What do they want?
Use this to cluster customers into relatively homogenous segments you can target.
The big question: is your share of the target market going to be profitable?
Marketing Strategy
The customer is at the heart of the strategy, but the environment is also critical.
The marketing environment has several variables but can be split into two broad categories, micro and macro.
The macro environment:
- Technology
- Economy
- Political/legal
- Cultural/societal
The micro environment:
- The organization and its objectives/resources
- The industry
- Competitors
- Partners
The marketing strategy has several variables it can control called; the 4 Ps/The Marketing Mix:
- Product
- Place (distribution)
- Price
- Promotion
Gaining Market Share
To gain market share in your target market, you must have a competitive advantage - an unique selling point.
Product differentiation can be found in many different ways:
- Better solution
- Better access
- Better quality
- Better brand (e.g. targeted towards kids/adults)
- Better price
Four Ps: Pricing Strategies
- Cost plus pricing: sell for cost of production + x% more
- Penetration pricing: sell as cheap as possible to gain initial market share
- Price skimming: for new services/products where it is initially sold at a high price until that segment of customers is depleted, at which point the price is dropped slightly to capture a new segment of customers that are willing to pay slightly less
- Value pricing: price at what you think people will buy it at, completely independent from the cost of production
- Competitive pricing: price at what competitors are pricing
- Psychological pricing: luxury products sell better at higher prices
Four Ps: Place
Distribution channels, warehousing.
Coke: online, dairy, bar, vending machine, supermarket.
NB: price changes depending on location
Four Ps: Promotional Mix
Advertising:
- TV
- Radio
- Magazines
- Billboards
- Websites
- Social media/influencers
- Bus backs
- Point of sale
- Retail stores (e.g. Apple Cube in NYC)
Public relations: when an organization creates goodwill/mutual understanding with target audiences through:
- Publicity: activities that promote a company/product via media not paid for by the sponsor - can be negative
- Sponsorship (can’t guarantee coverage so not exactly advertising)
- Newsletters, magazines
- Trade shows, conferences
- Lobbying
Also:
- Sales promotions (e.g. buy one get one free)
- Personal selling: actually selling the product