MMK277 Marketing Exam Notes

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1 MMK277 Marketing Exam Notes Module 1: Chapter 1: Marketing: Creating and Capturing Customer Value Objective 1: Define marketing and outline the steps in the marketing process What is marketing? An activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large The marketing process (hand draw this in notes) Objective 2: Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts Understanding the marketplace and customer needs Marketing is all about creating value for customers. Organisations must fully understand customers and the marketing place in which it operates Needs, wants and demands Understanding customer needs, wants and demands in detail provides important input for designing marketing strategies Needs: states of felt deprivation (p6) Wants: the form human needs take as shaped by culture and individual personality (p 6) Demand: human wants that are backed up by buying power (p6) Marketing is not always about increasing demand Demarking is marketing in which the task is to temporarily or permanently reduce demand eg lowering the road toll Market offerings: goods, services and experiences A market offering is a product that is some combination of goods, services and experiences that can be offered to a market to satisfy a need or want (p 7) A product includes: Physical objects, services, persons, places, ideas and organisations! Anything that satisfies a need can be called a product! Marketers often use the expression goods and services to distinguish b/w tangible and intangible components these should be viewed as continuum and not as a basic dichotomy! Experiences have been included to reflect the benefits gained through experience eg going on holidays Customer perceived value and satisfaction! Customer perceived value is the difference b/w the values the customer gains in owning and using a product and the costs of obtaining the product. Benefits vs costs! Customer satisfaction is the extent to which a products perceived performance matches a buyers expectations Exchanges Exchange is the act of obtaining a desired object from someone by offering something in return Several conditions must be satisfied for an exchange to take place: - At least two parties must participate and each must have something of value to the other - Each party must want to deal with the other and be free to accept or reject an offer - Each party must be able to communicate and deliver Transactions A transaction is marketing s unit of measurement A transaction consists of a trade of value between two parties It must be possible to state what each party is giving and gaining Relationships Relationship marketing is the process of creating, maintaining and enhancing strong, value-laden relationships with customers and other stakeholders Markets Market: a set of all actual and potential buyers of a product or service (hand draw graph in notes) Objective 3: Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy

2 Designing a customer-drive marketing strategy Marketing management is: the analysis, planning, implementation and control of programs designed to create, communicate and deliver value to customers and facilitate managing customer relationships in ways that enable the organisation to meet its objectives and those of its stakeholders the art and science of choosing target markets and building profitable relationships with them Designing a customer-driven marketing strategy: selecting customers to serve A winning marketing strategy asks what customers will we serve? and Who is our target market? Marketers cannot serve all customers in every way with a single market offering It is necessary to select customers that can be served well and profitably Look at page 11 Selecting customers to serve Managing demand means managing customers who come from two groups: new and repeat customers Marketers retain customer by: - Ensuring that branded goods, services and experiences offer intrinsic value - There is a sense of excitement or enjoyment associated with the marketing offering and communication used The key to offering excitement is involvement and interactivity Choosing a value proposition The organisation must decide how it will differentiate and position itself in the marketplace A value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs For example, McDonald s value proposition was written by its founder Ken Croc: McDonalds stands for friendliness, cleanliness, consistency and convenience Marketing management orientations Look at page 15 and write in notes Societal Marketing Concept Same as above Body shop: The body shop uses only vegetable based materials for its products. It is against Animal testing, supports community trade, active self esteem, defend human rights and overall protection of the planet Preparing an integrated marketing plan and program Hand draw into notes Objective 4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return Customer relationship management Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction Customer value and customer satisfaction Customer perceived value: refers to the customer s evaluation of the difference b/w all the benefits and all the costs of a marketing offer relative to those of competing offers (p 19) Customer satisfaction: refers to the extent to which a product s perceived performance matches a buyer s expectations (p 19) Capturing value from customers Creating customer loyalty and retention " growing share of customer " building customer equity " building the right relationship with the right customers Create customer delight delighted customers remain loyal and use positive word of mouth (WOM) To increase share of customer use cross-sell (buy itunes for your ipod) and up-sell (buying top of the range ipod) techniques to market more products and services to existing customers Lifetime value of all a company s current and potential customers ie customer equity The company classifies customers based on potential profitability and manage its relationships Building the right relationship with the right customer (hand draw graph) Objective 5: Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts

3 The changing marketing landscape The uncertain world economy Measuring marketing s contribution to organizational performance The growth of not-for-profit marketing Not-for-profit marketing The digital age Rapid globalization Sustainable marketing: the call for more social responsibility So what is marketing? Pulling it all together (hand draw graph) Module 2: Chapter 2: Company and marketing strategy: partnering to build customer relationships Objective 1: Explain company-wide strategic planning and its four steps Objective 2: Explain marketing s role in strategic planning and how marketing works with its partners to create and deliver customer value Marketing Process The process of analyzing marketing opportunities, researching and selecting target markets, designing market strategies, planning marketing programs, implementing (including organizing) and controlling the market effort Companies often develop marketing plans at the beginning of the year, and then never look at them again Sometimes implementing certain strategies may not work So need to adapt them in order to suit consumers Need to develop strategies that adapt to our current market Need to look at distribution strategies, pricing strategies etc Planning is fundamental in industry always work 2 years ahead of schedule Which is hard to do as you don t know what will happen in enviro Need to come up with programs and implement them and monitor them carefully Always a budget $1.5million only implement of strategies! Never ever use all of budget up just in case you need to make changes to strategy If you re an org need to keep monitoring and changing strategy to suit need of consumer Company wide strategic planning: Defining Marketing s Role The process of developing and maintaining a strategic fit between the organization s goals and capabilities and changing marketing opportunities Eg. Milo product just powder but now they do ice-cream, bars, pre-made drinks etc so they deviated into different product categories But if small org better to stick to what you know stick to what you chose to enter into to begin with Due to budget constraints etc Need to come up with strategies that will diminish any threat like a SWOT analysis Steps in strategic planning (hand draw graph) Look at companies mission (what do you want to achieve) all companies have goals and objectives at the marketing and organisation level With any setting of goals and obj s need to be achievable keep it simple stupid Smaller goals in order to help achieve them Need to decide what will make up business portfolio Within business unit, then need to work out marketing plans from there Defining a market oriented mission 1. Market oriented and based on satisfying customer needs 2. Emphasize company s strengths in the marketplace 3. Meaningful and specific yet motivating 4. Should not be stated in sales or profits Something to note: Should not be myopically constructed (eg. We make and sell furniture) rather should be market oriented Good eg. We are a leading austraian food company Our purpose is to create long term value for stakeholders The purpose should then be reflected in the core values of the company ie. How is the company successful in creating value for its customers and the wider community (including stakeholders)

4 ! Trying to achieve = core values! Really important when developing products about what the benefits are for the customers! Greater we can convey values of product better for customers Designing the business portfolio example The business portfolio is the collection of businesses and products that make up a company! Cargill (consumer products) rumba meats, tender choice pork! Cargill (animal nutrition) purina, loyall, acco feed, nutrena! Cargill (ingredients B2B) maizewise, progressive baker, clear valley! Cargill (financial and agricultural services) Can t standardize all communication need to be different Analysing the current business Portfolio: THE BCG Looks at growth rate and relative market share! Don t want a lot of dogs in portfolio! Want to divest of brand! stars are what you want to keep most profit! cash cow not as good!? not as good lots of potential but may have not seen it yet hand draw image Objective 3: Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it Marketing or business plan? The business plan incorporates the plans of all functions production, R&D, finance, human resources, IT and marketing The marketing plan has its focus on customer acquisition, retention and the resources needed to implement specific marketing functions (up to 12 months, strategic MP up to 5 years) 1. Most marketing plans cover one year, but some cover a few years 2. Plans vary in their length from 10-over 50 pages 3. Frequently cited shortcomings of marketing plans lack of realism, insufficient market and competitive analysis and a shortrun focus Managing the marketing effort (hand draw graph) Good to look for opportunities in the market! Demographics noted that they were time poor! Developing products for people who are time poor Objective 4: list the marketing management functions, including the elements of a marketing plan (from a major project context) and discuss the importance of measuring and managing return on marketing investment Elements of a marketing plan! Executive summary! Current marketing situation! SWOT analysis! Objectives and issues! Marketing strategy! Action programs! Budgets! Controls Executive summary! The marketing plan should open with a brief summary of the plan! This executive summary is aimed at the senior manager to enable them to grasp quickly the plans major points 1. Current marketing situation Current marketing situation: background of the company. Current company info Market description: describe the characteristics of the year old eg. Lifestyle habits, attitude, perception toward blood donation, media habits Product review: overview of blood donation in Aus Industry review: evaluation of the blood services including market positioning strategies, inhibitors to blood donation

5 Channels and logistics review: describe how blood services are currently accessed in the market 2. Marketing Analysis: SWOT analysis # May need to make assumptions # SW: company level products, branding, etc, is there marketing effective # OT: external level enviro, macro factors # Should be direct flow # Does the Aus BS brand themselves well? # Particularly to category? # Do they need to change it in order to target this market # Maybe need to turn to twitter etc Objectives and Issues # After the SWOT analysis the manager needs to identify the objectives to be addressed in the marketing plan # Two types of objectives must be set: financial (pricing strategy) and marketing # Normally about 4-5 objectives # Need to implement something that is simple and achievable and has a time frame # Issue analysis: what is going to stop us from achieving our goals and objectives # Is there something which will stop us form being successful # Such as inability to communicate with target market etc The product-market expansion grid # Most org s want to gain greater market share # So want to penetrate the market # Have an existing market but want to improve it # Some companies may have the same product but want to target it differently eg coco pops " 3-4 years ago decided a new strategy to target adults # Targeted adults brought up with adults did not work however # Can also come up with totally new products, existing target market but come up with different features (eg mobile phones multiple phones targeting same market) # Or we could totally diversify totally different market with different product # This is a dangerous strategy going into the unknown # Apple did this while bringing up ipod etc # How might this relate to the AUs BS: may want to penetrate further into new markets # Concentrated too much on the middle age bracket and ignored younger gen Issue analysis # What do you believe will be your key issues? This should be derived from the SWOT analysis and your objectives eg. Ability to attract the target market # year old is smallest bracket for blood donation Marketing strategy and the marketing mix # Your ideas! # Strategy section on its own and action program section is on its own # Strategy intend to do, action program how you intend to do it # Eg. Want to use television why have you done this? # Eg. Social media 80% target market uses this need research to provide with rationale # Social media is the strategy, FB/twitter is the implantation # Hardest part of strategy section # 4 P s price, product, promotion, place (accessibility to blood service) Customer-driven marketing strategy "! Market segmentation! Market targeting! Market differentiation and positioning Developing an integrated marketing mix "! Product strategy! Pricing strategy (pricing strategy is not required in the marketing plan for the blood service)! Distribution strategy (accessibility)! Integrated marketing! Communication strategy (advertising, promotions, PR etc) # Expect more than just advertising! Marketing research

MMK101 SUMMARY NOTES Marketing Fundamentals Exam Preparation

MMK101 SUMMARY NOTES Marketing Fundamentals Exam Preparation LINK TO PROQUEST EBOOK THROUGH DEAKIN PORTAL (Armstrong et al 2017, Principles of Marketing, 7th edition) LO = Learning Objective Word count: