Marketing Strategy – I: An introduction

Learning ObjectivesDemonstrate an understanding of the marketing concept.Describe the role of marketing.Appreciate the importance of marketing research.Explain the factors affecting buying behaviour.Demonstrate an understanding of the target market.

What is marketing? Marketing is the management process responsible for identifying, anticipating and satisfying customer requirement profitably

Marketing ConceptAn organization remains in business by profitably satisfying and servicing customers

Marketing Mix – 4PsProductPricePromotionPlace

Relationship between marketing Concept and Marketing Mix

The Marketing Concept

Put the customer first

Find out what customers need

Supply satisfactions for those needs

Means that we= produce what people want to but, NOT sell what we like making

So we must = organize and co-ordinate the company so that this happens

In order to = carry out market research

Which we do by offering the right

Marketing Mix

= Product – the right article= Price – at the right price= Place – through the right channels= Promotion – in the right way

Important information required for marketing

activitiesMarket size Consumer profilesTypes and nature of the products in the marketNumber and market share of the competitorsStrategies of the competitorsAnnual sales of the market in the pastGrowth potential of the market

Marketing ResearchThe purpose of marketing research is to reduce the area of uncertainty surrounding business decision

Roles of marketing research

Markets – what the public wantsMarketing strategies and tacticsInteraction between marketsMarketing methodsProduct/services

Steps in Marketing Research

Definition of problemSituation analysisPreparation of research design

Determine information designPrimary research/ secondary research??Research methodologyFormulate sampling plan

Collection of dataTabulation and analysis of dataPreparation and presentation of reports

Primary VS Secondary Research

Primary Research/ Field ResearchPrimary data: information which does not already existE.g. survey,observation, experiences

Secondary Research/ Desk ResearchSecondary data:Information which already existInternal and external source

  Primary Data Secondary Data

Characteristics •- Data already existing, having been originally collected for some purpose other than project on hand•-Internal (from company itself) and external•- e.g. data from government (census), commercial publications, or regular MR services

Advantages -      data collected is specific to the market research

•-     often available at little or no cost - has already been collected (save time)

Disadvantages - collected for another purpose need to be adapted before it can be used

- original data collected specifically for the current research project

- From(i) Observation(ii) Experiences(iii) Survey

-very expensive-Time consuming

Research Methodology – Methods of Primary

Research (1) Questionnaires / Survey

MailingTelephonePersonal Interview

o Questionnaire Design

Advantages and disadvantages of different survey contact

methodsAdvantages

Telephone surveyHigh response rateQuickReach scattered geographical areas

Postal surveyReach scattered geographical areasRespondents have enough time to answer the questions

Disadvantages

Can ask only simple questionsLittle control over the respondents

Low response rateLittle control over the respondentsTakes a long time to collect the responses

Personal interviewCan observe the respondents’ reactionsCan ask more complex questionsHighly flexible

Bias may existTime consuming and costly

Research Methodology – Methods of Primary

Research (2) Observation

Often used by retail firms “watching” consumers in their stores or meters on the TV sets to monitor viewing

(2) Experiments PanelsConsumer panels: involves a group of consumers being consulted on their reactions to a product over a period of time

Sampling Procedures (1) Select the population- target

population for a particular product(2) Select the sampling units(3) Select the sampling frame(4) Select the sample design(5) Select the sample size(6) Select the sampling plan(7) Select the sample

Factors evaluating a marketing research programAccuracySpeedAdequacyCommunicationCost

Factors affecting consumer buying behaviour

Personal factors

Interpersonal factors

Economic factors

Perceptions Culture State of the economy

Experience Ethical standards

Purchasing power

Needs Social influences

Interest rates

Values Family influences

Tax rates

Personality

Rational buying motives

The socially approved reasons

behind purchases

Emotional buying motives

The psychological reasons behind

purchases.

A typical buying processProblem

recognitionAwareness

Initial Interest

Making adecision

Evaluation

SearchingFor

alternatives

Market SegmentationDefinition: to identify people with similar needs and breaking down a market into sub-groups with similar characteristics

Market segmentation factorsFactors Illustrations

Demographic:Age Infant, child, teenager, young adult, mature adult,

middle-aged adult, old-aged adult

Sex Male, female

Income Low income, middle income, high income

Occupation Unskilled worker, skilled worker, clerk, administration, professional, housewife, unemployed

Education Illiterate, primary school graduate, secondary school school graduate, university graduate

Religion Christian, Catholic, Buddist, Taoist, othersRace Oriental, White, Black, others

Geographic:

Country China, Japan, United States, United Kingdom, others

Settlement Urban, suburban, rural

Climate Equatorial, tropical, subtropical, temperate, polar

Psychological:

Social class Lower class, middle class, upper class

Life style Carefree, working style, materialistic, others

Rational economic:Benefit Quality, after-sales services, warranties

Price Discounts, credit facilities, prices of substitutes

Undifferentiated marketing strategy

A single set of marketing

strategies for the whole

heterogeneous market.

Differentiated marketing strategy

A separate set of marketing

strategies for each segment in the

market.

Concentrated marketing strategy

Concentrating the marketing effort

on a particular segment in the

market.

Target market

The segment to which marketing

efforts are directed.

Market PositioningProduct Positioning

A product may be engineered to be better

than the competition in some respect or at

least different in some desirable way

Promotional Positioning

The emphasis is more on product image and

how it is to be distinguished from

competitors by advertising