Marketing Principles Introduction - 1

nguyp035's version from 2016-05-11 16:13

Section 1

Question Answer
What is marketing?Human activity directed at satisfying needs and wants through exchange processes
It is a function and a set of processes that creates, communicates and delivers value to customers whilst managing customer relationships to benefit the organisation and its stakeholders
NeedsThe difference between current states and ideal states, e.g. hungry, cold - these are basic - removes feeling of deprivation
WantsThe (manifestation of) needs for a particular product - these are unlimited
Demandswants with "enough" buying power - forming the market - ability to purchase at a particular time at a given price

Section 2

Question Answer
What 3 aspects do we consider when observing the market?Customers (needs and wants change/tastes), competitors (erode market share), environments (economy,law)
What is value?Value is the perceived difference between the benefits (minus risk) received and the costs for acquiring the benefit
Formula: VALUE (perceived) = Benefits (solution) - cost (financial & opportunity) - risk (unfulfilled promises)
What is Value Proposition?A set of benefits to satisfy customer' needs - to make a product more attractive
Does price reflect value?NO

Section 3

Question Answer
Formula: Satisfaction = Performance - expectations (If performance is > expectations = satisfied)
Why is satisfaction important?To keep customers by satisfying their needs & wants - to gain repeat/loyal customers which means effective communication

Section 4

Question Answer
TOPIC 2 - Marketing environment analysis
What is a business plan?A formal statement of business goals, if they are reachable/attainable with background info about the company
What area's does the plan cover?Strategical plan, financial, marketing, HR, pricing plan etc.
Strategic plan defines the...mission objective - portfolio growth strategies - evaluates environment
Marketing plan defines objectives - evaluates the environment & situation analysis - define/implement/monitor market strategies

Section 5

Question Answer
Strategic plan
Mission statements desribes...what the group is going to do, and why it's going to do that. / action-orientated / e.g. Kent = provide higher education of excellent quality
Evaluating the internal/external environment consists of...the macro, micro and internal environment.
Internal environment consists of..controllable elements e.g. employees, relationship with supplier, functional areas, responsibility, financial stability
Micro-environment (within industry) consists of...un-controllable elements (depends) e.g. customers, suppliers, competitors, publics, intermediaries
Macro-environment (external) consists of..un-controllable elements e.g. PESTEL

Section 6

Question Answer
PESTEL Analysis
Political factors covers...local regulation and global business e.g. stamp duty buy-to-let..
Economicpurchasing power of customers, size of the economy, distribution of income, business cycle, exchange rates etc.
Social/culturalDemographics, customs/conventions, language, religion, deeply hold belief
TechnologicalOnline buying, distribution, digital media, social media - how technology impacts our business
LegalEU, environment, food safety, copyright
Why is PESTEL used?To appriase the contextual environment and, with judgement, as a guide to strategic planning
PESTEL is...a GUIDE and not a solution. It is to be completed based on the context - not factors have the same impact on different companies - significance of each factor varies greatly - some factors hard to classify - evaluation requires a subjective judgement

Section 7

Question Answer
Developing portfolios
Growth-share matrix (BCG) identifies...high-growth prospects by categorizing the company's products according to growth rate and market share. - search for products with growth opportunities
Starshigh market growth & market share (has most cash) e.g. monopolies - eventually turn into cash cow if sustained and growth slows.
Question Marks (problem children)high market growth, low market share (consume high cash but low return) - potential of becoming a star (remainder divested i.e. separate)
Cash Cowslow market growth, high market share (leaders) - generate more cash than consume - 'milk the gains' cash used to pay debts, etc.
Dogslow market growth & share (breakeven) - to be liquidated (stopped)

Section 8

Question Answer
Strategic Planning
Who does It?Top level corporate management
What do they do?1 define missions - 2 evaluates ext & int environment - 3 sets org or unit objectives - 4 establish portfolio - 5 develop growth strategies
Marketing Planning
Who does it?Top functional level management e.g. marketing director
What do they do?1 situation analysis - 2 set marketing objectives - 3 develop marketing strategies - 4 implement strategies - 5 monitor and control strategies
Operational Planning
Who does it?Supervisory managers
What do they do?Develop action plans to implement marketing plan - 2 use marketing metrics to monitor how the plan is working

Section 9

Question Answer
Situation Analysiscollection of methods used to analyse the internal and external environment & to understand the capabilities of an organisation
Carried out at...the marketing functional planning level
SWOT Frameworka study to identify an organizations internal strengths, weaknesses and external opportunities and threats - 'focus is ourselves'
Strengths and opportunities are..Helpful and of internal origin
Weakness and threats are...Harmful and of external origins
5C Frameworkused to understand the internal and external environments - focus is on surroundings
Companystudies the companies product line, brand image, capabilities, vision
Customersknowing the audience, market size, segments, channels, purchase patterns
Climatelooks at the macro-environment and the factors affects how the business operates - PESTEL
Competitorsunderstanding competitors strengths, weaknesses, position, market share and to predict their actions
Collaboratorsexternal stakeholders companies team up with - relationships with agents, distributors, suppliers, etc.
The Porter's 5 forces frameworkanalyses the nature of competition - assesses profitability and attractiveness of industry - looks at competitive structure
Forces will...vary within different industries - every industry is different e.g. in size, market size, distribution channels - model can be used to identify why profits in some industries are low
Low industry profits associated with..strong suppliers, strong buyers, low barriers to entry, many substitutes
High industry profits...weak suppliers, weak buyers, etc.
Threat of new entrantsnew entrants likely to steal market share, rivalry intensifies
Threat of substitutessubstitutes limits price that can be charged, reduce profits - loyalty limits its extent
Bargaining power of suppliersif have power, they will sell at higher price, squeeze industry profits
Bargaining power of buyerspowerful customers can drive down prices, supermarket dominated by small number of large retail chains able to have power over suppliers e.g. dairy suppliers