Cursuri Marketing (ENGLISH)

8/12/2019 Cursuri Marketing (ENGLISH)

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Curs 1

MARKETING AS A SIENCE AND ACTIVITY

1. Marketing as an economic scienceAccording to this, marketing is part of the economic science system which consists of several groups

of economic sciences and the relationship among them.

The main groups:

a) General economic sciences: macroeconomic planning, economicsb) Sectorial economic sciences: industrial economic, tourismc) Firm economic sciences: management and marketing (for public institutions). Marketing as a

science studies different aspects of the microeconomic level (macroeconomic=national;

microeconomic=institutions)

d) International economics sciences: international economics/relations/e) Historical economic sciences: economic way of thinking or the history of the national economicf) Mixed economic sciences (combination between 2 sciences): economic geography, international

cybernetics, econometry

Marketing as a science is an economic science that studies the markets need and in addiction,

marketing as a science deals with specific tools (scientific instruments), such as scales.

2. Marketing as an activityThe economic activity is a system which connects two main economic subjects (consumers and

producers).

The classical parts of the easy activity:

- Production- Distribution- Exchange (selling)- Consumption (to use or not to directly consume the product)Marketing is a new way of life,

ECONOMIC CONCEPTS

- Concept of client- Concept of exchange relationships- Concept of the demand


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- Concept of need- Concept of utility

The client Individual or organization which is part of a transaction The marketing approach takes into consideration a large sense of a client when in different

contexts we face and identify new clients (a buyer, a company, a student, a patient, a

lawyer)

The exchange relationships

In the following relation between two parts having the following features:o Each part wants what the other one haso Each part has the freedom to accept or refuse the transactiono The process of negotiation must be considerate

The demand

The demanded quality at different levels of price According to the marketing approach, the demand is extended to some specific characteristics

of it converting into other concepts such as negative command

The need Is considerate an individual organization requirement in the relationship to the subject According to the marketing approach, needs to be accepted in a larger sense such as secret

needs

The utility

The economic concept that has to do with the level of satisfaction the client gets. There arethree types: a) placed utility; b) time utility (nonstop delivery); c) complex utility (includes both

place and time utility)

MARKETING FUCNTION

1) The research of the market needs (premise function: starting point)2) The connection of the enterprise to the market (a way of doing- how?)


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3) Satisfying the clients needs (why?)4) Maximizing the profit

MARKETING ENVIRONMENT1) Micro-mark environment (individual and companies)2) Macro-mark environment (has to do with the entire economic society)The Marketing environment is a complex set of variables, which influence directly or indirectly the

organization.

1) The Micro environment: consist of all variables that influence the organizational activity beingsituated is what is called the neighborhood of the company. The most importantcompanies:

PROVIDERS (companies that provide different resources that are specific input for the

organization, such as providers of raw materials, providers of human resources, etc); THE

CLIENTS (can be considerate the beneficiary of the product and efficient companies have (???)

to understand the consumers behavior. This is why companies studies the consumers behavior

either directly with the help of specialists or asking there kind of studies from research

institutes). Most important group consider that businesses may be dedicated to individuals and

this is called business to consumer (B2C); INTERMEDIATS (are economic agents (companies)

that help with the distribution, meaning that they buy in order to sell- they buy big quantity and

sell small quantity); PUBLIC AGENCIES (social organizations that provide specific services for the

benefit of the entire society); COMPETITORS (they consist of the similar organizations that

provide similar goods or necessities. Competitors have different behavior in different markets-

Monopoly Market, Oligopoly Market, Monopolistic Market *second companies that provide

similar products that they differentiate the product using the (???) or the publicity*)

2) The Macro environment: consists of specific national factors which generate the characteristicsof the context in which a company acts. The most important components are: THE ECONOMIC

COMPONENT (reflects in the national economic structure orientated to industry, services,

agriculture sections or all of them. The economic environment can be characterized by special

indicators like GDP (Gross Domestic Products, PIB), inflation rate, implement rate, etc); THE

DEMOGRAPHICAL MACRO ENVIRONMENT (which has to do with the distribution of the

population in different groups from total population to legal population and group of

employers); SOCIAL INDICATORS (natality/mortality and specific demographic percentage); THE

TECHNICAL ENVIRONMENT (which consist of material capacity to integrate into business the

results of the technical progress through the process of innovation); THE INFORMATIONAL

COMPONENT (that has to do with all the national factors that support the process of using

information in the business); THE LEGISLATIVE COMPONENT ( has to do with all the documents,

rules, processes according laws the legal fundamental for the business); THE CULTURAL

COMPONENT (consist of accepting the difference if society, individuals and companies. Most

relevant cultures are the following: a) individual culture, b) organizational culture, c) the


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economic culture, d) the general context culture (ex: European culture). There are two main

principles that apply to three components. 1) the fundamental values of society to not change in

time, 2) the secondary values change in time: the idea of individual relationship, the perception

about groups, about the society, about life and about nature).

In the contemporary context, organization behave according to their possession they have or theywant to achieve into near future in the market.

Organizations are divided in four categories:

1) The Leader position: the 1stcompany according the special economical indicators (profit,revalues, market share- percentage of the market)

2) The Challenger company- the 2ndcompany, that wants to be leader.3) The Follower group of companies- smaller companies that do not want to be leaders, they feel

comfortable with their position

4) The small group of companies- companies that copies strategies from big ones.Each position of the company is reflected in the market strategy. For instance, of a leader company

develops a strategy to protect and consolidate its position. The Challenger company implement

strategies that are inspired from military area (attack strategy). The other two groups make copies of

what the 1stdo.

Curs 4

THE CONSUMER BEHAVIORI) Characteristics of the Consumers in the Market

The consumer behavior is a set of reactions on the market, in terms of accepting or not

accepting some goods or services.

Consumption is the process developed as a consequence of a buying process generated from

the system of individual needs.

Consumption can be:

a) According to the subject of the consumption: individual, group or society consumption-public services, transportation;

b) According to the frequency of the consumption: current (happens every day), periodical(not so often); occasionally (it happens once or twice in a lifetime- a car, a house)

c) According to the source of operating the consumption: self consumption (when youconsume something you did by yourself-cooking); provided consumption (by others-

selling-buying)

d) According to the effect a consumption invest in the process of consumption: a)consumption of basic product- convenience goods-> characterized by small effort; three


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categories: 1) basic product (bread), 2) (???) product (pills), 3) (???) product ; b) the

specialty goods when the effort of buying and searching for that product is higher

(goods for a long time- TV, machines; c) the specialized products (professional goods-

special professional camera; d) goods that are not wanted (we do not need and will not

buy .

There are three phases in the process if consumption:

a) The cognitive phase: when consumers look for informationb) The affective phase: when the consumer has already decided for the buying or not buying the

product

c) The active phase: when the consumer starts to act/ becomes part of the transaction.

Models of consumptionThere are two main models of consumption:

1. HOWARD SHETH: this model explains the consumer process as a system of connecting fourphases and these are: 1) of information, 2) of decision, 3) of the buying process and the

consumer itself, 4) of evolution and feedback.

2. NICOSIA: consist in two phases: 1) the perceptual phase, when consumer builds an appreciationtowards a product, 2) the phase of learning process, when the consumer decides after an

evolution if he wants to buy the product or not.

Curs 5

MARKETING STRATEGY

1. The general market strategy2. Product strategy3. The price strategy4. The distribution strategy (placement)5. Promotion strategy

1) THE GENERAL MARKET STRATEGYConsists of a set of general market actions a company takes in order to achieve its goals.

The market strategy takes into consideration some criteria, and for each of them specialists in

marketing identify general operations/alternatives.


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In order to define a market strategy, the company has to identify all the possible alternatives for

the identified criteria. The possible actions for the market strategy are the following:

a) according to the market dynamism, the options for the company are:1. strategy of increasing the market share2. strategy of maintaining the market share3. strategy of decreasing the market share

b) according to the second element: the market structure, the following options are to beconsidered:

1) strategy of different products (differential strategy)2) strategy of identical/ similar products (non-differential strategy)3) strategy of concentration in production (idea of having 1,2 or 3 products, connected

to each other)

c) according to the market changes there are the following options:1. active strategy (company pays a lot of attention)-> dynamic companies2. adaptive strategy (company pays attention to some aspects of strategy)3. passive strategy (organization that does not take into consideration the market

changes)

d) according to the market exigent:1) strategy of high exigency (quality)2) strategy of medium exigency3) strategy of low exigency

e) according to the level of the competition1. offensive strategy2. defensive strategy

In order to develop a market strategy, the company picks up one option for each element.

Example of general market strategy: company A defines for its strategy the one of increasing the

market share of concentration in production, of adaptive strategy of high quality and offensive.

The market strategy once developed has to be reflected in specific strategies at least according to

the four elements of the market mix.

The market mix is a complex concept of connecting different marketing areas through strategic

actions. The four marketing mix elements are: product, price, place (distribution) and promotion.

2)

PRODUCT STARTEGYIn marketing, production is very important in terms if characteristics/features of the product.

The marketing department must know about the product, about its history and life, about its

relations to other products of the competition.

The marketing specialists make a differentiation between products (existing products, current

products, on one hand and new products on the other hand).


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Economists, psychologists and marketers together have decided that the life of a product can be

easily compared to the human being life, so they act like humans. They consider that products

are born, they develop, they become mature products and they get out.

The life cycle of a product consists of different phases from the moment of launching till its

disappearance.

The traditional life cycle

units sold

I II III IV time

I: introduction to the market

II: growing phase

III: maturity phase (stable)

IV: declining phase

New products: a new product in a marketing approach means more than a product created

through inventions. It can be an innovative product as a result of innovation. Examples: a new product

for a new need; a new product for an old need; an existing product for a new need; an existing product

distributed through a new channel; existing product with a new price= new product; existing product

with new promotions, etc.

The product strategy means to identify each option, such as:

1) According to the number of sortiments (sortimental range)a) Strategy of extending the number of productsb) Strategy of maintainingc) Strategy of decreasing

2) According to the speed of renewal (how fast you are able to renew the product)a) Strategy of effective renewalb) Strategy of maintaining

3) According to the quality of the producta) Strategy of high qualityb) Strategy of medium quality


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a) Level of prices: strategy can be: high prices, medium prices or low prices. In order to get thelevel of the price, companies must look to three elements (the Three Cs): Cost, Competition,

Consumer, Clients (the purchasing power).

b) Diversity of prices: price strategy connects the number of the prices to the number of theprices to the number of the sortiments, as there can be the following situations

1. The number of the prices is higher of the number of sortiments2. The number of prices is identical to the number of sortiments3. The prices are lower than the number of sortimets

c) Strategy can be1. Stable prices (in time it doesnt change the level of the price)2. Strategy of dynamic prices (prices that change in time).

Curs 7 (final)

Distribution and distribution policy

A. Helping questions:1) What is the process of distribution?2) What are the functions of the distribution?3) What is direct distribution in comparison with the indirect one?4) What is selective distribution?5) What are the measurements of the distribution channel?6) What are the main categories of intermediates in the process of distribution?7) What are the main trends in the distribution area?8) What are the main elements which constitute the base on choosing the

distribution channel?

9) What are the distribution strategies?10) What is intensive distribution?

B. Explanations and commentsThe whole trade activity, respectively the circulation of goods is linked to the distribution area.

Distribution consists of all techno-organizational and economical processes which aims the routing

and transmission of the flow of goods and services from manufacturer to consumer. Thereby, this

economic area relates not only to the processes, operations and elements of material nature that make

up the distribution infrastructure, but also to the staff in carrying out these operations.

Distribution occupies an intermediary place between production and consumption and it has a role

given by the its functions, and those are:


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Transfer of the ownership of the property by sale The transmission of the products, which means transport, storage, manipulation, assembly

or removal, packing, etc.

Distribution may be:

a) After the type of circulation of the products: Direct Reverse

b) After the number of distributors Intensive Selective Exclusive

c) After the element distributed Physical Of negotiations Of tenure Promotional Informational

d) After its achievements Unilateral Two-way.

Direct distribution consists of the transmission of elements in distribution in the direction of

manufacturer-consumer, using the direct relationships between these two are one or more

intermediates.

Reverse distribution is that form of distribution of products that goes from consumer to

manufacturer.

Intensive distribution seeks the placements of products by all means in order to obtain a better

satisfaction of the market; this type of distribution is used for current goods which are purchased

typically by consumers without trade preferences.

Selective distribution seeks the use of a limited number of intermediates and its used especially for

long-term goods for which consumers have a trade preference.

Exclusive distribution its a policy distribution which presumes the placing of good thru one

distributor; it is applied in the selling of goods and exports.

Psychic distribution it is called logistics and consists in effective transportation of the goods and

services in the needed quantities and at the right time thru the set channels. Logistic presumes the

organization of many shipping, transportation, receiving, storage, pre-packing, sort, display, marketing

etc. processes.


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The flow distribution of negotiations, of ownership, of promotion and information may be

simulated or uncorrelated with logistic. For simultaneous distribution of these flows with psychic

distribution, the respective goods undergo the same route as the goods themselves. For uncorrelated

distribution, those flows follow another route than goods.

Unilateral distribution consists in the organization of the route in one way, from manufacturer toconsumer that economic flows undergo.

Two-way distribution goes both in terms of route from manufacturer to consumer, but also

reverses, from consumer to manufacturer.

The distribution channel designates the goods itinerary ,a set of operations and intermediates that

ensures the transfer of the goods to the destination (products, advertisement, questionnaire, report,

ownership, etc.)

The distribution channel may be:

Direct, if the distribution between manufacturer and consumer is based on the relationsbetween them, without intermediates;

Indirect (with intermediates), when there is one or more, mediators of transfer frommanufacturer to consumer, even though they dont enter into possession of the goods.

The distribution channel knows more dimensions:

- Length- Width- Depth.The length of the distribution channel allows the classification into long and short, after the number

of intermediates involved in the distribution area. The long channel is a variant of the circuit which uses

for consumer goods that undergo the trail manufacturer-consumer thru 2-6 intermediates working in

distribution area with wholesale or retail.

The short channel is a variant of the distribution circuit in which the trail manufacturer-consumer

presumes the implication of only one intermediate, usually from retail market area.

The width of the distribution channel refers to the number of participants which exists with thesame sequence of the distribution channel (for example, the number of retailers).

The depth of the distribution channel refers to the approach degree of the final points of sale, in

other words consumers (a very deep channel is for the home delivery distribution).

The distributors can be grouped in more categories on the basis of several criteria:


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By the nature of the flows in which they imply themselves:- Intermediates for all flows- Intermediates for some flows.

By the sequence of the product circuit there may be:- Intermediates close to the manufacturer- Intermediates close to the consumer.

By the variety of the distributed goods:- Specialized intermediates- Large profile intermediates.

By dependence on other participants in the distribution area:- Totally dependent of manufacturing company intermediates- Intermediates acting on behalf of other economic agents- Intermediates operating on the entry of the goods- Intermediates that become owners of the distributes goods- Totally independent intermediates.

In the context of contemporary economic life, distribution area is characterized by concentration,

integration and specialization.

The concentration of the distribution is reflected in practice by the gigantic distributors which

intermediates different activities, having lower unit costs.

The integration of the distribution its a phenomenon uniting distributors from different stages of

the manufacturer-consumer route (vertical integration) as well as intermediates places on the same

sequence of the distribution channel (horizontal distribution).

The specialization of the distribution consists of the integration of the specialized infrastructure,

endowment of the distributors with material-technical elements that have the advantage of creating

better distribution conditions of the goods and the disadvantage of the unadapting of the materials on

the distribution of the unrelated goods.

Like the other strategies of the market mix, distribution strategies can be addressed from more pints

of view.


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The channel of distribution used by a manufacturing company for the goods distribution can be

chosen on the basis of several elements:

The volume of the distributed goods The nature of the distributed goods Territorial allocation of the distribution devices The length of the distribution channel The waiting time imposed by the distribution process The services offered by the intermediates The life-cycle stage of the good (for example, a new product may be distributed through a

special channel if its addressed to passionate consumers; a product placed in the

developing stage will be distributed through a high capacity channel, more or lessspecialized; and in the maturity stage, will be chosen a channel that generates low costs;

and in the declining stage, the distribution will have the lowest costs).


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C. Schemes and correlationsCRITERIA

STRATEG

IES

The size of the

channel

The scale of

the

distribution

The degree of

elasticity of

the

distribution

device

The degree of

the

involvement

of producer

The control

degree of the

distribution

Goods

logistics

Direct

distribution

(without

intermediates)

Distribution

with

intermediates

Extensivedistribution

Selectivedistribution

Exclusivedistribution

Distributionby fixed

appliance

(linear)

Distributionby flexible

device

Distributiononly thru

intermediates

Distributiononly thru

own device

Mixeddistribution

Distribution with

control

(high,

medium,

low)

Distribution with

inexistent

control (of

the prices,

areas of

display,

etc.)

Distribution by the

displaying

mode

(bulk, pre-

packed,

etc.)

Distribution by

transport

means


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Chapter 6. Promotion and promotion

policy

A. Helping questions1. What is promotional policy?2. What are the elements of the communication system between enterprise and society?3. What are the advertising policy forms?4. What objectives represent the advertising activity?5. What are the advertising forms?6. What is product advertising?7. What are the main communication techniques used in advertising?8. What is an advertisement?9. What are the advertising strategies?10.What are the principles underlying the creation of effective advertising actions?

B. Explanations and commentariesPromotional policy contains, in general, all actions through which the flow of information, ideas and

messages between the enterprise and society aiming to increase the sales on the market.

Promotion is a part of the marketing mix, role of advertising activity in the process of achieving goods

and in the process in informing the enterprise regarding the consumers demands.

The communication system between enterprise and society has a few elements:

The information source (enterprise) The message The idea, information that is to be transmitted Message support (commercial, advertising film, ad in press, etc.) Recipient.In general, enterprise-society communication goes both ways.


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Promotional policy has the following forms:

a) Publicity (advertising)b) Point of sale advertisingc) Merchandised) Sale promotione) Public relationsf) Other advertising forms.

a) Publicity (advertising) consist of the total of actions and means used to make public variousproducts, ideas, attitudes, etc.

The advertising seeks to assure the costumer comprehensive information regarding an activity,

product or service, to convince and determine the consumer to act in favor for the enterprise. It aims

the long term modification of the different behavior of the costumers and, of course, to maintain the

fidelity towards an enterprise, company, product, etc.

Advertising objectivesmay be diverse:

o Creating a new marketo Extending the marketo Correlation of the seasonal demand with the permanent supplyo Raising product quality.

Advertising knows more forms:

By the publicity objective- Product advertising- Institutional advertising

By territorial area of message spreading- Local advertising- National advertising- International advertising

By market nature in which it manifests, the receiver of the message


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- Advertising for industrial users- Advertising for intermediates- Advertising for final users.

Product advertising is the most spread advertising form internationally in the process of demand

stimulation of certain products and costumer fidelity training and consist of actions of promotion of the

products characteristics and the effects and utility of it. Those may be:

- Informational, when aimed at informing the public regarding a new product on themarket

- Conditional, when aimed at stimulating the demand for a product or brand in thecondition of other similar or substitutable products on the market and it is used in

the products developing or maturity stages.

- Comparative, when making a promotional policy to a competing brand- Reminder, when aimed on re-launching of a product entered in the declining period

Institutional advertising involves the establishment to the public of a favorable attitude and

attachment of the enterprise and its offer.

Local advertising is made by retailers that have an identified sale market and addressed through

promotion.

National advertising is made by enterprises that have national range and may cover only

production, only sale or the production and marketing of a product.

International advertising it manifests under the form of national, international propaganda

regarding a certain attitude, products, brand, etc.

Advertising aimed for industrial users is generally restricted and aims at the manufacturing or

purchasing decisions of enterprises with various inputs.

Advertising for intermediatesit is also restricted and consists in information actions of distributing

agents regarding the characteristics of a product and the consumers demand for that product.

Advertising for final consumers it is the most frequent form of advertisement and consists in all

costumers information and influential actions of purchasing and consumption.

There are more techniques(means) of communication used in advertisement:

- Press- Television


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- Radio- Cinema- External advertising- Free advertising- Catalogues, booklets, etc.

Press may be daily or periodic.

Daily presshas the following

o Advantages: Flexibility ( adds differ from an area to another) The prestige of the newspaper Wide area broadcast High possibility of splitting the message

o Disadvantages Short life Mediocre presentation of the ad

Periodic press(magazines) has

o Advantages Socio-professional high selectivity Responsiveness recipient The life of the message is longer

o Disadvantages Low flexibility Longer period of time required in broadcasting the message.

The ad has an illustration, text and slogan and it depends and in terms of efficiency depends on

several factors, such as:

The ad size


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The location on page, newspaper, or magazine The frequency.

The radio represents an advertising environment, addressed quickly and with regularity to a wide

range of a products costumers. It has:

o Advantages:- Flexibility- Relative low costs- High mobility.

o Disadvantages- The massage is only audio, which means a partial imagine on the moment of the

product.

The television is a publicity support with the widest expansion because it has audio, image and

movement and provides a complete information to the receiver. It has:

o Advantages:- The impression of direct contact with the product- Satisfactory flexibility- Fast and repetitive emission.

o Disadvantages- High costs- Low selectivity of the costumers segments.

Cinema it is high costs advertising technique that is unable to identify the subjects to which it

addresses. There are two categories of advertising films: the documentary film (which lasts about 30

minutes) and the advertising film itself (lasts 5 minutes.

External advertising covers the posters, billboards and illuminating signs and it has the advantage of

transmitting simple, concise ideas meant to boost the sale of a product, and the disadvantage of a too

concise message that does not provide enough information to the receiver. The posters differ in terms

of presentation of information, the exposure place and the duration of the exposure.

Free advertising it materializes in any form of new about a product or service (like the interview of a

banks chairman).


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Catalogues, booklets, etc. are presentation instruments of a product or enterprise in a form of

prospecting, of working or lux.

The advertising activities can be carried out efficiently if the following principles are to be followed:

The principle of argument selection thru which the effect of advertising actions are

conditioned by picking a certain characteristic of the product that is considered to be the

most convincing;

The principle of the convergence means thru which it aims a harmonious combination

between more possible means of promotion to assure the best enhancement of the

advertising arguments.

The principle of uniformity advertising which refers to the fact that the market is made of

typical and non-typical consumers and to have an efficient advertising company there

should act on the typical consumers.

b) Point of sale advertising represent a form of promotion of the product thru information andinfluential techniques on the specific costumers of the shop. In other words, they are attempting

to transform the motivation of purchasing in the act of purchase itself using:

- Information on the spot- Open exposure of some products- Promotion thru brand, package, etc.

c) Merchandise is a form of promotion that is usually used in distinct professions:- The merchandise of the manufacturer that refers to the design, the product aesthetics,

packing and aims to achieve a more attractive product.

- The merchandise of the distributor, that has all the products display operations, theassociation of selling products and its manifested in practice thru technical

demonstrations.

d) Sale promotions represents a set of methods aimed at sale acceleration , preventing orremoving large stocks, etc. emphasis being on providing advantages to the costumers, thru

offering different facilities in the purchasing process:

- Discounts- Group sales- Contests.


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Discounts are given to counter the competition or when the price is too high and is an obstacle in

the products selling or when a decrease of the sales is noticed.

Group sales refer to simultaneous or successive selling of two or more products at a totally lower

price than the sum of the products prices individually.

Contests are an attractive promotion method by the interest atmosphere created among potential

customers.

e) Public relations implies the cultivation of direct contacts made by the enterprise in a systematicway with different categories of costumers, with influential people of management of other institutions,

with opinion leaders aiming to obtain their support in the marketing of products.

Public relations are found under the form of reception techniques used in relation with the press

and evocation techniques related to special events.

f) Other promotional manifestations:1) Expositions, fairs, international exhibitions aiming at gathering of new costumers;2) Using well advantaged brand for manufacturer (market control, launching of new

products, repeat sale) but for costumers as well thru the facilities granted to the

products selection;

3) Sponsorships that assures an important financial support for some events, often forcultural or sportive ones making the brands and the products known to the public.

Promotional strategies are aiming at creating a favorable attitude towards a product, brand or

enterprise. Their determination is made thru the identification of an action direction suitable for each of

these criteria:

a) By the role assigned to promotional activity: Offensive strategy (aims at conquering a market, removing the competition); Defensive strategy (maintaining a stable position on the market)

b) By the promotional object

Product or service strategy (aims at creating a favorable attitude towards a product)

Corporate strategy ( aims at corporates image)c) By the arguments nature, sustained by promotional activity

Informational strategy (aims messaging)


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Cursuri Marketing (ENGLISH)

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