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Notes - Colleges Marketing Part
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BMO21306 Marketing PartLecture 1
Invisible hand = the route most people choose to invest the money in, which has the most
value. So not so much invisible, it is just the manager who decides where to create value for
customers. Adam Smith: consumption is the sole end and purpose of all production.
Marketing concept = the key to achieving organizational goals is being more effective than
competitors in creating, delivering and communicating superior customer value to your
target markets.
- Identifying market segments/target market. Not for everybody. Just large group of
people with specific need.
- Challenge to be more effective than competitor: do it better, better understand market
and customers. Then you can be successful.
Business unit strategic planning
In management: strategy is about corporate level (higher in the organization).
In marketing: Strategy: plans, lower in the organization. Strategic business unit level. Closer
to the market business planning/product planning
- Business mission (set at the higher levels)
- SWOT analysis
- Goal formulation (make use of your strengths and take the opportunities in external
environment)
- Strategy formulation (marketing comes in here) value creation
- Choose the value
1. Segmenting
2. Targeting
3. Positioning (=creating image of your product/company in the
minds of the consumer) (can do by conceptual mapping)
- Provide the value
1. Product development
2. Service development
3. Pricing
4. Sourcing/making
5. Distributing/serving
- Communicate the value
, 1. Sales
2. Advertising
- Program formulation
- Implementation
- Feedback and control
Holistic marketing concept
4 different elements:
- Internal marketing
- Integrated marketing
- Relationship marketing
- Performance marketing = marketing managers are accountable for what they do
(show that money is spend worthwhile)
o Present your plan to the general manager, decides if it is worthwhile – show
prove and evidence how going to spend their money quantitative marketing
models.
Quantitative marketing models
Use it because:
- Marketeers are held accountable
- Better business decisions with empirical evidence
- Business generate and collect data
What is a quantitative marketing model:
- Simplified representation of the world
- Build to help us understand the world
- To make predictions and decisions
Identifying competition:
- Differentiation (what you do to an offering): creating tangible or intangible
differences on one or more attributes between a focal offering and its main
competitors
- Positioning: a set of strategies a firm develops to differentiate its offering in the
minds of its target customers. Successful positioning will result in the offering
occupying a distinct, important, and sustainable position in the minds of the target
customers.
Realize:
1. Customers decide tradeoffs decide which drink they want. And which brand.
Customer decides what the competition is.
Competition is decided by customers
2. Level of competition: determines your
marketing strategy. Four types of
levels.
a. Convince on brand – product
category competition (coke,
fanta)
b. Convince on product – product
form competition (diet and
normal coke)
c. Convince on way to satisfy –
generic competition (other
beverages)
, d. Convince on cost-benefit – budget competition (rentals) – show it is the best
(appropriate) way to spend their money.
Identify competitors with data
How to identify competitors:
- Brand-switching analysis: two questions and make a matrix. How many will switch
from brand and how many will stay. Competition is determined by the tradeoff that
customers make.
o The two questions should be independent (not related)
o Consumer judgement: SPSS (cross tabulation between the two questions
from current to future). Compare last row with last column.
- Chi-square test: shows whether there is a relationship between the two questions.
Shows whether the answers that you actually get are different if there would not have
been a relationship between the two questions.
o Calculate expected count in every cell = share first/total * share second/total *
total (number of people in the sample)
o So here: 64/180 * 54/180 * 180 = 19.2
- Standardized residuals: (O-E)/SQR E, so, observed number – expected count /
square root of the expected count.
o Standardized residuals > 1.96 in absolute value are significant (brand choice
is not random relative to market share)
o If not significant value: all are very close to zero, which means that the
customers are not loyal and will switch easily.
o Here it is 6.8, so significant (can see that when looking at the diagonal)
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