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Marketing Midterm Summary
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Marketing - ALL STUDY MATERIALS COVERED
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Lecture notes marketing UVA 2023
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MARKETINGPART 1: Introduction to Marketing Management
Chapter 1: Scope of Marketing for New Realities
VALUE OF MARKETING
- Financial success often depends on marketing ability – creating demand for products and services resulting in jobs and
profit.
- Chief Marketing Officer (CMO)
- Constantly need to monitor customers and competitors to continuously adapt and improve.
- Value is always created and captured by business in traditional marketing. However, now this is not true. With new
technologies C2C and C2B has become easier and consumers have become marketers e.g. the sharing economy, solar
panels
- Marketing does not always end with the sale of products and services. Currently our economy is majorly based on a linear
economy which focuses on the philosophy of take, make, dispose. Results in food waste and plastic pollution.
- A circular economy the consumer is encouraged to recycle or reuse. It is one way to achieve the sustainability development
goals (2030 Agenda for Sustainability). They have been adopted by all United Nations member states.
- Goodlife goals: developed by Futerra. Individual goals for consumers building on the sustainability development goals.
THE SCOPE OF MARKETING
What is Marketing?
- Marketing: identifying and meeting human and social needs; the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
(American Marketing Association – AMA).
- “The aim of marketing is to make selling superfluous … to know and understand the customer so well that the product or
service fits him and sells itself.” (Peter Drucker – management theorist). This is a pull-strategy.
- Marketing management: the art and science of choosing target markets and getting, keeping, and growing customers
through. Creating, delivering, and communicating superior customer value.
What is Marketed?
ENTITY
Goods Physical goods/tangible items e.g. food products.
Services Advanced economies have a large proportion of services e.g. airlines, barbers.
Events Time-based events e.g. Olympics, trade shows.
Experiences Orchestrating goods and services e.g. Walt Disney World
Persons E.g. artists, musicians etc.
Places Places trying to attract tourists, residents, company headquarters etc. Place marketers include real estate
agents and local business associations.
Properties Intangible rights of ownership to either real (real estate) or financial (stocks and bonds) property.
Organizations Use marketing to boost public image and compete for audiences/funds e.g. museums and non-profits.
Information Produced by books, schools, and universities and distributed to parents, students, and communities.
Ideas Products and services are platforms for delivering some idea or benefit.
Who Markets?
- Marketer: someone who seeks a response from another party (the prospect).
- Prospect: an individual or group from who a marketer seeks a response such as a purchase, a vote, or a donation.
- If two parties are looking to sell something to each other, we call them both marketers.
- Marketing is not only done by the marketing department. All touch points, where the customer interacts with the company,
needs to be properly managed e.g. store layouts, packaging, employee training etc.
- Interdepartmental teamwork is necessary.
,What is a Market?
- Market: groupings of customers.
- A collection of buyers and sellers who transact over a particular product or product class.
- Types of markets:
o Need markets e.g. diet-seeking market
o Product markets e.g. shoe market
o Demographic markets e.g. “millennium” youth market
o Geographic markets e.g. Chinese market
o Voter markets
o Labour markets
o Donor markets
- Four key customer markets:
1. Consumer
2. Business
3. Global
4. Non-profit
- A simple marketing system:
o Inner loop: exchange of money for goods and services.
o Outer loop: exchange of information.
CORE MARKETING CONCEPTS
Needs, Wants, and Demands
- Needs are the basic human requirements e.g. air, food, water,
shelter, clothing.
- Humans also have strong needs for recreation and entertainment, and these become wants when directed to specific
objects that might satisfy the need.
- Wants are shaped by society.
- Demands are wants for specific products backed by an ability to pay.
- Marketers do not create needs: needs pre-exist marketers.
- Five types of needs:
1. Stated needs – the customer wants an inexpensive car.
2. Real needs – the customer wants a car whose operating cost, not initial price, is low.
3. Unstated needs – the customer expects good service from the dealer.
4. Delight needs – the customer would like the dealer to include an onboard GPS system.
5. Secret needs – the customer wants friends to see him or her as a savvy customer.
Target Markets, Positioning, and Segmentation
- Everyone has different needs and wants and thus marketers identify distinct segments of buyers by identifying
demographic, psychographic, and behavioural differences between them.
- Marketers look for the segments that present the greatest opportunities.
- For each target market, a market offering is developed that positions in buyer’s minds as delivering some key benefits.
Offerings and Brands
- Value proposition: sets of benefits that a marketer proposes to deliver to satisfy customers’ needs.
- The intangible value proposition is made physical by an offering, which can be a combination of products, services,
information, and experiences.
- A brand is an offering from a known source. All companies stive to build a brand image with strong, favourable, and unique
brand associations.
Marketing Channels
- Three marketing channels to reach a target market:
1. Communication channels: deliver and receive messages from target buyers e.g. newspapers, magazines, radio,
internet, billboards etc. Communication is also done through the look of retail stores or websites.
2. Distribution channels: help display, sell, or deliver the physical product or services to the buyer or user.
3. Service channels: warehouses, transportation companies, banks and insurance companies.
Paid, Owned, and Earned Media
- Communication with customers:
1. Paid media: show brand for a fee e.g. TV, magazine, display ads, sponsorships etc.
2. Owned media: communication channels that the company owns e.g. brochures, Facebook page, website etc.
3. Earned media: when outsiders (consumers, the press etc.) voluntarily communicate something about the brand.
Impressions and Engagement
, - “Screens” or means to reach consumers: TV, Internet, and mobile.
- Impressions, which occur when a consumer views a communication, are a useful metric for tracking the scope or breadth of
communication’s reach that can also be compared across all communication types. However, the downside is that
impressions don’t provide any insight into the results of viewing the communication.
- Engagement is the extent of a customer’s attention and active involvement with a communication, which is more likely to
create value for the firm e.g. Facebook “likes.”
Value and Satisfaction
- The buyer chooses the offerings he or she perceives to deliver the most value – the sum of the tangible and intangible
benefits and costs.
- Value is primarily a combination of quality, service, and price, called the customer value triad.
- Value perceptions increase with quality and service but decrease with price.
- Satisfaction reflects a person’s judgement of a product’s perceived performance in relation to expectations. Customer may
either be disappointed, satisfied, or delighted.
Supply Chain
- Long channel stretching from raw materials to components to finished products carried to final buyers.
- Each company in the chain captures only a percentage of the total value generated by the supply chain’s value delivery
system.
- When a company acquires competitors or expends upstream or downstream, its aim is to capture a higher percentage of
supply chain value.
Competition
- All the actual and potential rival offerings and substitutes a buyer might consider.
Marketing Environment
- Task environment: includes the actors engaged in producing, distributing, and promoting the offering.
o Company
o Suppliers: material suppliers, service suppliers
o Distributors and dealers: agents, brokers, manufacturers
o Target customers
- Broad environment:
o Demographic environment
o Economic environment
o Social-cultural environment
o Natural environment
o Technological environment
o Political-legal environment
THE NEW MARKETING REALITIES
- There a new marketing behaviours, opportunities, and challenges emerging. With three transformative forces.
1. Technology: rise in e-commerce, mobile internet, and web penetration.
2. Globalization: the world is becoming a smaller place and more multicultural.
3. Social responsibility: elevating corporate social responsibility by focusing attention on issues such as poverty, pollution,
climate change etc.
- These three forces have dramatically changed the workplace and provided new capabilities.
NEW CONSUMER CAPABILITIES NEW COMPANY CAPABILITIES
Using internet for information and purchases. Use internet for information and sales.
Search, communicate, purchase on the move. Collect information about markets, customers, and
competitors.
Tap into social media to share opinions and express loyalty. Reach customers quickly.
Actively interact with companies. Improve purchasing, recruiting, training and
communications.
Reject marketing they find inappropriate. Improve cost efficiency.
- Traditional companies are revisiting reintermediation.
- The rise of private labels and mega brands, plus a trend toward deregulation and privatization have also increased
competition.
- Many companies have deregulated industries and privatized companies to be more efficient, to increase competition.
- Marketers have to justify their investments in financial and profitability terms.
- Market value comes from intangible assets such as brands, or customer base, and intellectual capital.
COMPANY ORIENTATION TOWARD THE MARKETPLACE
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