Marketing philosophies:

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2 Marketing philosophies: Production: o the philosophy that consumers favour the products that are available and highly affordable, and that management should therefore focus on improving production and distribution efficiency o Useful in 2 types of situations: Demand exceed supplies When the production cost is too high and it is needed to bring it down Examples: Henry Fords an Model T car Product: o The idea that consumers favours the products that offer the most quality, performance and features, and that the organisation should therefore devote its energy to making continuous product improvements o Can lead to market myopia: overlooked the need and concentrated on the product Selling: o The idea that consumers won t buy enough of the organisation s products unless the organisation undertakes a large-scale selling ad promotion effort o Practiced with unsought product o Try to sell what they make rather than what market wants short term focus o Examples: Political party: meeting supporters, making speeches, kissing babies and shaking hands Marketing: o A firms can achieve their goals if they know the needs and wants of their target markets and deliver the desired satisfaction better than the competitor do o Different from selling philosophy Selling Marketing Starting point Factory Market Focus Existing product Customer needs Means Selling and promoting Integrated marketing Ends Profit through sales volume Profits through customer satisfaction Societal marketing: o Marketing strategy should deliver value to customers in a way that maintains or improved both consumers and society s well being o Socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving and enhancing the ability of the future generations to meet their needs

3 Marketing environment What is the marketing environment? The actors and forces outside marketing management s ability to develop and maintain successful transactions with its target customer Contain 2 major components: Microenvironment: the forces close to organisation that affects its ability to serve its customers Macroenvironment: a larger societal forces that affect the whole microenvironment Why is it important to understand the marketing environment? Because the marketing environment is: Unpredictable (eg: death of CEO) Change rapidly (eg: change on government policy, global financial crisis) May offer opportunities (eg: new technology, investment opportunities in local and oversea) Have significant impact on organisation s strategy, operations, positioning, success and marketing program Six major forces of the microenvironment Marketing intermediaries: Firm that help the organisation to promote, sell and distribute products to the final customer

4 Resellers Physical distribution firms Financial intermediaries Marketing agencies Channels that helps the organisation to find customer or make sales to them Includes: wholesalers, resellers firms that help organisation to stock and move to from their point of origin to their destination Eg: warehouse firms, transportation firms (railways, trucing, airlines, shipping organisation) Determine the best way to store and ship goods and balancing costs, delivery, speeds and safety. Online distribution is the bases for new businesses intermediaries that help the banks to finance transaction and insure against the risks with buying and selling goods Affect by the credit costs, limited credit or both establish good relationship is important for financial insitutions Examples: Banks, credit organisation, insurance organisation facilitating agencies that help the organisation to target and promote product to the right markets Examples: advertising agencies, media firms, export and consulting agencies and local marketing consulting firms Customers: B2C individuals and household that buy goods and services for personal and household consumption B2B organisation that buy goods and services for further processing and use in production process Reseller Organisation that buy goods and services in order to resell them at a profit Government government agencies that buy goods and services in order to produce public services and transfer goods and services to others who need them International overseas buyers Gain success through: Competitors:

5 Provide greater customer value and satisfaction than its competitors from adapting to the needs of target customer positioning their offering against competitors offerings in customers minds Strategy: Large organisation can dominant by providing benefits that small organisation can t afford Small organisation is more flexible to give better rates Consider international competitor Publics The company itself: Designing marketing plans take accounts and work closely with other groups o Eg: Finance department finds and use funds to carry out marketing plan, R&D focus n designing safe and effective products, human resource ensure sufficient personnel with appropriate skills Follow the goals, missions, broad strategies and policies set by the senior management

6 Six major forces of the macroenvironment Forces Demographic (involves people, they make up markets) Trends Population structures (age, genders, geographic shift, ethnic diversity) Population in general (size, growth rate, income level) Demographic groups (Gen X, Gen Y, baby boomers) Immigration (government policy, immigration rate) Education (skilled laboured for employees, women joining workforces) Economic (affect consumer buying power and spending patterns) Technological (affect new technologies creating new product and market opportunities) Political Cultural (Institutions and other forces that affect society s basic values, perceptions, preferences, and behaviours) Natural (inputs by marketers or which are affected by marketing activities) Income, savings, spending patterns, inflation rate, employment rate, interest rate Increased regulations, rapid changes in technology, high R&D budget Legislation (laws), enforcement (ACCC), political stability, ethnic & social responsibility, special interests/pressure groups Core values (honesty, individualism, freedom/democracy, giving to charity), subculture (aged group, gender based group, ethnic based group, social group), shift in secondary values (people views of themselves and views of others (due to technological advancement), loyalty and trust toward large organisation are declining, social orientation is changing, views of environment and universe) Shortage of raw materials, increase cost of energy, increase pollution, government intervention

7 Marketing research: What is marketing research? The function that links the consumer, customer and public to the marketer through information used to: o identify and define marketing opportunities and problems o generate, refine and evaluate marketing actions o monitor marketing performance o improve understanding of the marketing process Four stages of the marketing research process

8 Information already exists somewhere Have been collected for another purpose Internal or external to the organisation \ Information collected for the current research purpose Raw data is check prior advance data present the major findings that are useful for the main decisions faced by management. Careful with bias interpretation can be carried out internally(own staff) or externally(outsou rced to other firms)

9 Commonly used in a situation where: It is hard-to-access respondents like busy executives and technical experts Access to groups is limited Group discussions might inhibit responses eg research into condom or tampon use and experiences Highly flexible, quick, low cost, but high risk of respondents not being able to answer questions & low response rate Ethnographic research A form of observational research where a trained observer watch and interact with consumers in their natural environments Webnography research Observing consumers in a natural context on the internet The moderator facilitates the group discussion on important issues using a predesigned protocol 6-10 people with moderator