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12/06/2016 10:02 PM

Introduction to Marketing
Objectives: Define the role of marketing in organisations, explain the
concept of value in marketing, and understand why marketing is
important both within and outside the firm
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Services are intangible customer benefits that are produced
by people or machines and cannot be separated from the producer (when
people buy concert tickets, it is not the physical ticket they are paying for
it is the experience they will gain
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Also, the price of the product they sell – must
determine the price of a product carefully on the basis of the potential
buyer’s belief about its value
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This is called Marketing Channel Management
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Advertising
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The process of
selling from one business to another is called B2B (Business-2-Business)
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Good marketing firms or departments work closely with suppliers,
marketing research firms, consultants and transportation firms to
coordinate the extensive process of discovering what customers want
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They must analyse the product’s:

Micro environment: Factors that effect the company immediately
and directly
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Corporate partnerships: Provide resources, may help with promotion,
selling, and distributing
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• Industrial market: organisations buying for producing other
services
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• Government and non-profit markets: those who buy goods and
services for public services
• International Market: individuals and organisations of other
nations who buy goods and services for either consumption or
industrial use
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Macro-Environment: Culture, country culture, regional culture
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Income, Education, Gender, Ethnicity
Social Trends: Thrift (money saving – lipstick effect)
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Economic Situation: Import and export market rates
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Segmentation
In order to define segmentation within your company’s marketing
strategy:
Step 1: Establish overall strategy or objective
Step 2: Segmentation methods
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Useful for
companies whose products satisfy needs that very by region
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• Demographic Segmentation – age, gender, income, education
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How people self-select
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People’s selfvalues, self-image, concept, lifestyles
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Occasion: behavioural
segmentation when a product is purchases or consumed aka
cereal in the form of bars, ceral, biscuits for different occasions
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Firms often employ a
combination of segmentation methods, using demographics and
geography to identify and target marketing communications to
their customers, then using benefits or lifestyles to design the
product and the substance of the marketing message
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Step 3: Evaluate Segment Attractiveness
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• Identifiable: firms must be able to identify who is within their
market
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Market too small = buying power insignificant

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Step 4:
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Step 5:
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Reachable: Needs to be reached or accessed through persuasive
communications and product distribution
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Profitable: determine potential profitability of each segment,
both current and future
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Develop Positioning Strategy
Involves defining the marketing mix variables so that target
customers have a clear, distinctive, desirable understanding of
what the product does or represents
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Positioning using perceptual mapping
Position is how customers view their product or service
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Determine consumers’ perceptions and evaluations of the product in
relation to competitors’
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Identify the market’s ideal points and size
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Identify competitors’ positions
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Determine consumer preferences
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Select the position
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Monitor the positioning strategy
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Because (1) markets are dynamic and consumer needs are
ever changing and (2) the market is saturated with alternative and
substitute products
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This is summarized
in the Ansoff Matrix or the Product/Market expansion grid
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sell existing products to existing markets = market penetration
2
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sell new products to existing markets = product development
4
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Without new goods or services, the value
of the firm will ultimately decline
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If some products in a portfolio do poorly, others might
do well
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Improving business relationships
Coca cola made a partnership in Latin America to give clean water and
their sales grew
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New products or pioneers become
readily recognisable to consumers and thus establish a commanding and
early market share lead
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-Touch of Yoghurt Shampoo – Consumers were not enticed by the idea of
washing their hair with yoghurt
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Early adapters – The second group that begins to use a product
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Its
members don’t like to take as much risk and therefore ten to wait until
the ‘bugs’ are worked out of a particular product
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When they buy, the product has achieved its full market potential
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Avoid change and rely on traditional
products
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How to help diffusion:
Relative advantage – If a product is perceived to be better than the other
alternatives, diffusion will happen quickly
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Observability – when products are easily observed, their benefits or uses
are easily communicated which enhances diffusion
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1
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R&D Consortia = Where R&D investments come from the group as a
whole and the participating firms share the results
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2
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Concept testing is the
process in which a concept statement is presented to potential buyers to
obtain their reactions
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Product Development
Balancing various engineering, manufacturing, marketing and economic
considerations to develop a product’s form
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4
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Pre Market testing = one popular test is called Nielsen BASES where
potential customers are exposed to the marketing mix variables, such as
the advertising, then are surveyed and given a sample
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5
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Promotion
Trade promotions – promo to wholesalers or retailers
Introductory price promotions – offer limited duration prices etc

Trade show – exposes what is available
7
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Price
Determine price
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Timing
10
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Introduction stage
2
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Maturity stage (SALES REACH PEAK)
4
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