Marketing and its role in the company · B2C B2C –business-to- consumer • Products are sold...

Marketing

and

its role in the company

Daniela Kolouchová

Positive Aspects of Marketing

• Increasing standard of living through innovations

(people obtain what they need and want).

• Simplifying buying process

(informing about the characteristics of products).

• Stimulating demand and increasing international

competitiveness of the business sector

(increasing welfare of the society).

• Helping non-commercial institutions.

• Increasing profitability of individual companies.

What is marketing?

• Philosophy oriented to the „Market/ Marketplace“.

• Business function balancing company profit and customer´s interest.

• Marketing is a social science, investigating the social reality,

studying market (customers, competition…), using knowledges from

other sciences :

sociology,

psychology,

statistics,

mathematics,

social and cultural anthropology,

Neuroscience

…

Definitions of marketing

• The following definitions were approved by the

American Marketing Association Board of Directors (July 2013):

„Marketing is the activity, set of institutions, and processes for

• creating,

• communicating,

• celivering and,

• exchanging offerings that have value for stakeholders (customers, clients,

partners, and society at large).“

• Philip Kotler,

one of the world’s leading authorities on marketing:

„Marketing is getting the right goods and services to the right people

at the right places at the right time at the right price

with the right communications and promotion.”https://www.ama.org/AboutAMA/Pages/Definition-of-Marketing.aspx

• Customer vs. Consumer (people)

• Customers - people who purchase our

product or service (whosaler; parents, partner,

housewifes…)

• Consumers - the end users; people who use

or “consume” our product (kids, husband, …).

Different marketing approach, strategies and

tactics.

Two main groups of clients on on the

customer side

Target Markets

Two main global markets

B2C B2B

B2C

B2C – business-to- consumer

• Products are sold from a company to the end user

• High volumes, low margin, extensive distribution networks, high stock turnover

FMCG (non durable goods)

Fast moving consumer goods

Physical, tangible products which are normally consumed in one or short

period of use

Frequently purchased essential or non-essential goods such as food, toiletries,

soft drinks, shoes, clothes

Durable goods (hard goods)

Physical, tangible products with extended period of use which survive many

uses

not quickly wear out, not consumed in one use

Example: cars, consumer electronics, furniture, sports equipment...

B2B

B2B – business-to- business

Trading between firms

Represents 80% of worldwide business

Commerce transactions between businesses;

• between a manufacturer and manufacturer

• between a manufacturer and a wholesaler

• between a wholesaler and a retailer

In marketing strategic decisions come first

2. TACTICAL MARKETING DECISIONS

How will the product look like?

What will be its price?

Where, how and when will we promote it?

How, when and in which place will we sell it?

1. STRATEGIC MARKETING DECISIONS

Who is our customer?

What is important to him?

How to satisfy him?

How to became competitive?

Two levels of marketing decisions

2. TACTICAL MARKETING DECISIONS

4P´s = Marketing MIX

1. STRATEGIC MARKETING DECISIONS

SEGMENTATION; TARGETING; POSITIONING

Strategic vs. Tactical marketing

• Strategic marketing defines our customer/consumer, competition

and main value of our product for customer/consumer.

• Customer Segmentation and Targeting – selection of an

appropriate target for our product/brand.

• Positioning - an image, identity, values of our product/brand

which company try to build in the consumer´s mind.

Main tool: Market research, competitive analysis…

• Tactical marketing is the concrete execution of strategic marketing

– „4P´s“ = Marketing MIX

4 P´s – Marketing MIX

• E. J. McCarthy proposed a four Ps classification in 1960:

1. Product – Good or servis (info, know-how…)

• How it looks like?

• Physical atributes, packaging, design…

2. Price

• How much can I charge for it?

• Quality + added value (value for money; luxury goods)…

3. Place - Distribution

• Where it should be sold?

• Exclusive boutique or hypermarket...

4. Promotion

• How to inform consumers about my product?

• Advertising, public relations, personal selling, event marketing…

Production

Marketing and its internal „partners“

Finantial dpt.

Sales dpt.

Purchasing

R&D

Research and

DevelopmentExport

Legal dpt.

CEO

(Chief executive

officer)

Customer/

Trade

Marketing

MARKETING

Brand

management

Marketing SBU

(strategic

business units

abroad)

Logistics

PRSpokesmen

Main external partners of marketing department

MARKETING DEPARTMENT

Creativeagency

Researchagency

Media agency

Creative agency – creates (develop)

and produces communication tools

(TV ad, print ad…) based on the

marketing brief.

Media agendy – handles the media

planning and buying for all media

channels selected by Marketing dpt.

Research agency - prepares,

conducts and evaluates results of

market research – e. g. target market,

consumer, competitor.

Marketing JOB Description

Key responsibilities of the marketing people:

• Developing and managing the marketing strategy, tactic and marketing plan

• Instilling a marketing led ethos throughout the company

• Understanding current and potential customers and competitors needs, developing

innovations

• Researching and reporting on external opportunities, monitoring competition

• Managing people and projects

• Managing agencies, approving media campaigns, communication images

• Analyzing sales data, competitive data, measuring and analyzing success/ flop

• Managing budgets

• Ensuring timely delivery

• Developing guidelines (communication,

internal-external processes)

STRATEGICMARKETING DECISIONS:

SEGMENTATION; TARGETING; POSITIONING

Market Segmentation Process

• 1. Total Market:Total Amount of buyers, consumers,customers with different wants, behaviors in a Total market

• 2. Market Segmentation:A process of dividing the Total market for a good or service into small, „same“ groups.

• 3. Target Market: A specific Market Segment of (buyers, consumers,customers or organizations) for which the producer designs specific activities (MKT Mix)

• Effective use of resources – by targeting a specific segment, much

investment can be saved, it is easier to manage and predict a

specific segment

• Gain a focus - customers with similar wants, needs and

characteristics can be focused

• Create relevant value for a target market

• Right and clear Positioning development

• WHO? WHERE? WHY? will buy?

Benefits of Market Segmentation

Bases for Segmentation

• There are various ways to segment a market.

• A marketer has to try different segmentation variables, alone and

in combination to understand the structure of the market in the best

way.

• The major variables are:

4. Behavioral

3. Psychographic

2. Demographic

1. Geographic

1. Geographic Segmentation

• Companies may divide the market into different geographic units

such as nations, countries, regions, cities, …

• A company may decide to operate in one or more geographic

locations but it must pay attention to the geographical

differences in needs and wants.

• E.g. McDonald’s serve corn soup in Tokio, pasta salads in

Rome, wine and salads in Paris, McDonald’s in India does

not sell beef products as it is strictly against the religious

beliefs

1. Geographic Segmentation

• Region New England, Middle Atlantic, and other census regions, Prague, street…

• Global vs. regional vs. local marketing approaches

• City Population Under 25,000; 25,001-100,000; 100,001-

500,000; 500,001-1,000,000; etc.

• Urban-rural Urban, suburban, rural

• Climate Hot, cold, sunny, rainy, cloudy

2. Demographic Segmentation

• Age and (family) life-cycle: needs and wants change with age, that is

why, a company may use different marketing approaches for

different age and life-cycle groups.

FAMILY LIFE

STAGIES:

• Gender

• Income: is mainly used for automobiles, boats, clothing, cosmetics,

financial services, traveling, …

• Credit cards are offered as ordinary, gold, platinum cards for

different income groups;


• Social class: A measure made up of a combination of characteristics

such as level of education, occupation, and the type of

neighborhood one lives in (Bronx or Manhattan)

• Ethnicity

Han China Papua Basque people

• Religion



• Culture

• Subculture

3. Psychographic Segmentation

• Personality: Ambitious, self-confident, aggressive, introverted, extroverted, sociable …mainly used for cosmetics, cigarettes, and liquor. Marlboro is targeted to the macho man with its macho Cowboy image.

• Lifestyle: Activities (golf, travel); interests (politics, art); opinions (conservation, capitalism)

• Values: what values consumers respect (charity, freedom, friendliness, honesty, family oriented, career oriented…)

4. Behavioral Segmentation

Knowledge, attitudes, uses or responses to a product.

• Occasions: buyers can be grouped according to occasions when they

buy or use an item. Usage in home/ outside…

• Benefit sought: buyers can be grouped according to the benefits what

they seek from the product.

• Toothpaste market benefit segments are - economic, medicinal,

cosmetic, and taste;

• Detergent market - cleanliness, cost;

• Chewing gum - healthy teeth, fresh breath…

• User status: ex-users, nonusers, potential users, first-time users,

regular users, love users of a product. All they require different kinds of

marketing approach.

• Usage rate: markets also can be segmented into light-, medium-, and

heavy- user groups. Most FMCG companies target heavy users.

• Loyalty status: a market can also be segmented by consumer loyalty.

Consumers can be loyal to brands (CocaCola), stores

(hypermarkets), and companies (SAP). Consumer may be completely

loyal (buy one brand all the time), somewhat loyal (favor one brand,

sometimes buying others), unloyal (each time they buy a different

product)

• Passive vs. active loyalty

4. Behavioral Segmentation

Most important segment characteristic

In relation to responsiveness to different marketing mixes, segments

must be:

• Homogeneous within – strong similarities

• Heterogeneous between – different characteristics of each

segment in order to prepare different Marketing Mix

Segmenting International Markets

Large companies e.g. Coca Cola, Sony, L´oreal… sell products in

many different countries which vary in their economic, cultural and

political make up. International firms need to group their world

markets into segments with distinct buying needs and

behaviors.

Several variables can be used to segment international markets:

1. geographic location; grouping countries by regions e.g.

Europe, Middle East

2. economic factors; grouping by population income levels or by

their overall level of economic development. Mature vs.

emerging markets

3. political and legal factors; grouping by the type of stability of

government, monetary regulations, and the amount of

bureaucracy.

3. Such factors can play a crucial role in a company’s choice

of which countries to enter and how.

4. cultural factors; grouping markets according to common

languages, religions, values and attitudes, customs and

behavioral patterns.

Segmenting International Markets

Positioning: 3rd step in strategic marketing

decision process 1. Segmentation: identify variables that allow segment the market

2. Targeting: Evaluate attractiveness of each segment and choose a

target segment

3. Positioning: Identify positioning concepts, test it, choose the

best and use it for creating detailed marketing mix

T1 T2 T3

P1

P3

P2

Targeting – choise of target groups/ segments

Focus

strategy

P 1,2,3 = Product 1, 2, 3 ( PC, Software, PC Components)

T 1,2,3 = Target 1, 2, 3 ( Households, companies, universities)


Selective

Strategy

Selective

Strategy

Selective

Strategy

T1 T2 T3

P1

P3

P2



T1 T2 T3

P1

P3

P2




Product Strategy

T1 T2 T3

V1

V3

V2


V 1,2,3 = Product 1, 2, 3 ( PC, Software, PC Components)


Market

Strategy

Positioning: 3rd step in strategic marketing

decision process 1. Segmentation: identify variables that allow segment the market

2. Targeting: Evaluate attractiveness of each segment and choose a

target segment

3. Positioning: Identify positioning concepts, test it, choose the

best and use it for creating detailed marketing mix

Positioning – identifying brand's/ product´s

uniqueness towards competition

Positioning has to identify:

1. Target Group – WHO will buy it?

2. The area you want to occupy – WHERE/WHEN my consumer will use it?

3. Point of difference vs. competition – WHY to buy exactly my product?

4. Reason to believe – WHAT convinces my consumer?

DO NOT FORGET TO SEGMENT

IN YOUR OWN BUSINESS

Develop your Target group profile in 5 steps:

1. Your core values – unique and competitive

2. Your core portfolio for CZ launch (incl. pictures)

Key product for communication

3. Main competitors in CZ (store check, desk research)

core values

core product with you want to compete with

target group

(seznam.cz)

4. Table of segmentation profile

of Czech consumer for your Brand

(be careful about the differences

vs. US consumer profile)

5. Profile „gaps“ which have to be clarified via your own research

Please send it to my attention in ppt format within March 23rd.

Demographic profile Geographic profile

Psychographic profile Behavioral profile

Your Target Group

Marketing and its role in the company · B2C B2C –business-to- consumer • Products are sold...

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